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A Blockchain is a growing list of records, called blocks, that are linked together using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkel Tree). The timestamp proves that the transaction data existed when the block was published to get into its hash. As blocks each contain information about the block previous to it, they form a chain, with each additional block reinforcing the ones before it. Therefore, blockchains are resistant to modification of their data because once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.
Blockchains are typically managed by a peer-to-peer network for use as a publicly distributed ledger, where nodes collectively adhere to a protocol to communicate and validate new blocks. Although blockchain records are not unalterable as forks are possible, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance.
The blockchain was popularized by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin, based on work by Stuart Haber, W. Scott Stornetta, and Dave Bayer. The identity of Satoshi Nakamoto remains unknown to date. The implementation of the blockchain within bitcoin made it the first digital currency to solve the double-spending problem without the need for a trusted authority or central server. The bitcoin design has inspired other applications and blockchains that are readable by the public and are widely used by cryptocurrencies. The blockchain is considered a type of payment rail.
Private blockchains have been proposed for business use. Computerworld called the marketing of such privatized blockchains without a proper security model "snake oil", however, others have argued that permissioned blockchains, if carefully designed, maybe more decentralized and therefore more secure in practice than permissionless ones.
History
Cryptographer David Chaum first proposed a blockchain-like protocol in his 1982 dissertation "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups". Further work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. They wanted to implement a system wherein document timestamps could not be tampered with. In 1992, Haber, Stornetta, and Dave Bayer incorporated Merkel Trees into the design, which improved its efficiency by allowing several document certificates to be collected into one block. Under their company Surety, their document certificate hashes have been published in The New York Times every week since 1995.
The first decentralized blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. Nakamoto significantly improved the design using a Hashcash-like method to timestamp blocks without requiring them to be signed by a trusted party and introducing a difficulty parameter to stabilize the rate at which blocks are added to the chain. the design was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.
In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20 GB. In January 2015, the size had grown to almost 30 GB, and from January 2916 to January 2017, the bitcoin blockchain grew from 50 GB to 100 GB in size. The ledger size has exceeded 200 GB by early 2020.
The words block and chain were used separately in Satoshi Nakamoto's original paper but were eventually popularized as a single word, blockchain by 2016.
Uses
Blockchain technology can be integrated into multiple areas. The primary use of blockchains is as a distributed ledger for cryptocurrencies such as bitcoin; there were also a few operational products that had matured from proof of concept by late 2016. Some of the major uses are as follows;