Bitcoin began in 2009 with Satoshi Nakamoto. It employs cryptography to minimize potential hacks. Satoshi’s solution for the double spending problem was revolutionary. It uses Proof of Work (PoW) to secure blockchain ledgers against duplication and cryptocurrency forging. For example, Bitcoin leverages miner nodes that compete to solve complicated mathematical problems. Miners who find new blocks are rewarded with bitcoins. This is also how the supply of bitcoins are increased.
Markets determine the value of bitcoins. Only production is controlled by the Bitcoin blockchain. Decentralization is fundamental to Bitcoin and the growing number of public blockchains. There are now hundreds of cryptocurrencies. Some of the more popular applications include voting, smart contracts, and crowdfunding. Blockchain for private use is drawing interest from financial institutions and other organizations. Following recent regulatory action, cryptocurrency developers are hurrying to improve upon existing architecture.
Ethereum, with its introduction of practical smart contracts, is often considered the second major development in the cryptocurrency industry. These are programs that add new blocks to a blockchain only after all party responsibilities are fulfilled. It brings dynamic applications to cryptocurrencies. Nevertheless, blockchain technology has a long way to go before it supplants existing mainstream architecture. Ari Juels, co-director of IC3, believes that blockchain organizations will eventually turn to the academic community
Bitcoin’s mining scheme is not perfect. One of the biggest criticisms is its slow transactions. Scalability is also a concern. This has led to a variety of alternative solution. Proof of Stake (PoS) is the most notable alternative. Though Delegated PoS has made quite a splash recently. PoS has become widely accepted enough to cause Ethereum to transition its blockchain away from PoW to PoS. The crypto community is learning to apply hybrid chains that are a combination both.
Clearly blockchain technology is about more than cryptocurrencies. Several well-known companies are employing their own private blockchains. These include companies like IBM, Google, Amazon, Alibaba, and Oracle. While private blockchains are a far cry from Satoshi’s vision, they demonstrate the need for alternative applications.
Ethereum peeked the world’s fancy as to the possibilities of dynamic crypto applications. Now, projects like the DPoS efforts of EOS are leaving many new developers awestruck of the emerging Internet revolution.