What prompted the launch of Blockchain?
Back In 2008, the world was rocked by an unprecedented financial crisis. Banks collapsed. Millions lost money. Trust in enormous institutions largely crumbled. This is when blockchain technology was introduced, primarily as a means to share and store information that didn’t rely on banks or intermediaries.
Let’s break it down in simple terms.
Table of Contents
What Is Blockchain?
Essentially, blockchain is a digital ledger — think of it as a notebook for capturing transactions. The difference is that once something is written, it cannot be deleted or changed. Furthermore, this notebook isn’t stored in one place, but is instead distributed to thousands of computers worldwide.
Even if someone tries to hack or cheat it, the system knows. That is how secure it is.
History of Blockchain
The concept of blockchain emerged long before it gained widespread adoption. But in 2008, a person or group known as Satoshi Nakamoto created Bitcoin. To make Bitcoin, they developed the first real blockchain.
In January 2009, the first “block” of Bitcoin was recorded. This marked the beginning of the technology we now know as blockchain.
What Prompted the Launch of Blockchain Technology?
This is the reason blockchain was created:
No more blind trust in banks: The 2008 meltdown made people realise that banks could fail. They wanted a system that did not begin with trust in banks.
To avoid cheating: Blockchain records are not changeable. Therefore, nobody could cheat or defraud other people in online transactions.
To solve the problem of double spending: In the digital world, it is easy to replicate something. Blockchain eliminates the possibility of the same digital currency being removed from the same account multiple times.
In short, the need for a fair, open, and secure system was the driving force behind the development of blockchain technology.
What Is Blockchain Technology and How Does It Work?
Here’s a simple way to understand it:
- When a transaction occurs (ex., someone sends money), that transaction is added to a “block.”
- The computers on the network all verify the validity of the transaction and reach a consensus.
- Once approved, they add the block to a chain of blocks, which is called the blockchain.
This makes it very difficult to hack. If you were able to modify one block, the entire chain would be broken, and the network would reject the new block.
Types of Blockchain
There are different types of blockchain:
- Public Blockchain: Open to everyone (like Bitcoin or Ethereum).
- Private Blockchain: Controlled by one group or company.
- Consortium Blockchain: Shared by a few trusted groups.
- Hybrid Blockchain: A mix of public and private features.
Each type has different uses. Some work well in open money systems, while others are used in areas such as banking, supply chains, and healthcare.
Why Is Blockchain Important?
Here’s why blockchain is essential:
- It builds trust without needing a third party.
- It helps stop fraud and cheating.
- It makes systems faster and cheaper.
- It can be applied in finance, voting, healthcare, and various other fields.
Previously, we relied on the trust of banks, companies, or individuals to manage our data; now, we trust the bank or other agencies, and now we trust the system.
Conclusion
What prompted the launch of blockchain technology was a significant challenge: the loss of trust in the surrounding ecosystem.
With blockchain, we developed a new way to create and share information that is secure, transparent, and not owned by a single entity. While it began with Bitcoin, it is now being used worldwide to create records of everything.
Whether you are sending money, storing documents, or verifying information, blockchain is disrupting the world.
