Blockchain history is still being written. Just how large of an impact will blockchain have on the world around us? Will its story be one of advancing humanity or just rife with controversy?
Because blockchain technology is a recent development, there are some concerned groups who consider blockchain to be a fad at best (and an outright cryptocurrency scam at worst). A Harvard Business Review article, that we’ll explore in more detail later, found that “many view blockchain technology and fintech as merely a new technology for delivery — maybe something akin to CD-ROMs.” Not exactly high praise.
Any major innovations are likely to create these feelings of fear and uncertainty. Consider the urban legend of the audience who ran out of the cinema, worried that the train running on the screen would come driving into them. While this image seems comical to us, it’s a fair representation of how society typically responds to unfamiliar experiences.
This hefty dose of doubt should be continued as a defense mechanism for society. While blockchain technology may not physically threaten our lives, it surely challenges our views of finance and economic markets. Ultimately, this level of scrutiny will encourage the continued refinement of our new technology. New features will be engineered. Those who financially back the technology will be rewarded for accepting the risk that comes as a early adopter.
A look back at blockchain history
The first commonly acknowledged work on blockchain occurred during the 1990’s. To provide a little context on the computer technology available at the time, a 1995 PC might have 8 MB of memory, 400 MB of storage, and a 33 MHz processor. Just over 20 years later, nearly all computer hardware has improved by one thousandfold. Still, these limitations didn’t stop computer scientists like Nick Szabo from starting early work on blockchain and digital currency.
It wasn’t until 2008 that blockchain technology really began to emerge on the public radar. In 2008, Satoshi Nakamoto (a individual or group of individuals known as the Bitcoin founder) published a paper that would introduce the world to blockchains and Bitcoin. “The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work.”
Over the next several years, Bitcoin would be known as the poster child for blockchain technology, attracting media attention for its volatile market price and association with private internet transactions.
Writing the next chapter of blockchain history
For Generation Z (those born in the late 1990’s), it’s hard to imagine living in world disconnected from the internet. It wasn’t that long ago that the internet was a technology only available to a select sample of the world population.
Even as usage grew, there was a lack of consensus on benefits of the internet. Newsweek magazine lampooned the internet to be a waste of time, a “virtual reality where frustration is legion and where—in the holy names of Education and Progress—important aspects of human interactions are relentlessly devalued.”
While many of the harmful societal accusations inside the editorial are remarkably true today, the internet still went on to completely revolutionize the media, news, and publishing industries. Just as the internet faced its own critics, blockchain is also taking on its own set of challenges.
Still, the future of blockchain seems bright. One Harvard Business Review, titled “The Blockchain Will Do to the Financial System What the Internet Did to Media,” posits that understanding and embracing blockchain is worth our time:
“Such a fundamental restructuring of a core part of the economy is a big challenge to incumbent firms that make their living from it. Preparing for these changes means investing in research and experimentation. Those who do so will be well placed to thrive in the new, emerging financial system.”
The research and experimentation behind blockchain extends outside of the financial system. One day, we may practically use a blockchain for everything. Applications of blockchain is still in early exploration. To say that blockchains’ only value lies in digital currency would be like saying the internet’s only benefit was email.
Outside of the financial sector, some of the blockchain technology’s cross-platform applications may include:
- Loyalty rewards programs: similar to currency, but instead a point-based system used to reward owners for brand-based advocacy and engagement
- Authentication: blockchains’ decentralization and transparency makes transactions difficult to fraud
- Voting: company shareholders or another electorate group can submit votes privately while the public ledger helps to protect against fraud
These are just a few examples of how blockchain may be used. At some point, expect blockchain to become involved with many industries. With all of the practical use cases, the conclusion seems clear: blockchain is a breakthrough in the making, and the story of blockchain history has much left to be written.