Strange it may seem, but the concept of blockchain was invented long before Satoshi Nakamoto created Bitcoin as A Peer to Peer Electronic Cash System.
Let’s take a look at the events preceding Bitcoin’s blockchain appearance.
The idea takes its roots from coding and deciphering. Early in the 1940s, a British mathematician Alan Turing, who was the first known cryptographer, deciphered the Enigma Machine. At the same time, the Americans decoded the Purple Code, a Japanese ciphering machine.
In the 1970s, Martin Hellman and Whitfield Diffie invented a special algorithm which split the encrypted keys into a pair — a private and a public key.
Then, in 1992, W. Scott Stornetta, Stuart Haber added Merkle Tree to the cryptography concept, boosting security, performance, and efficiency.
However, this technology was not used, and the patent ended in 2004, four years before Bitcoin appeared.
In 2004, a scientist and cryptographer Hal Finney introduced a system called RPoW, which was Reusable Proof Of Work. The system operated by getting a non-exchangeable Hashcash based PoW token and in return created an RSA-signed token that could then be transacted from person to person.
RPoW solved the double-spending problem by keeping the ownership of tokens registered on a trusted server. It also allowed users worldwide to verify its correctness and integrity in real-time.
In 2009, Satoshi Nakamoto introduced his white paper Bitcoin: A Peer to Peer Electronic Cash System. The technology that underpinned the Bitcoin was called blockchain. It solved the problem of trust because each time a transaction was made, it was bundled together with other transactions and stored in a block. The block was then placed on the chain, which couldn’t be changed.
Based on the Hashcash PoW algorithm, but rather than using tools trusted computing function like the RPoW. The double-spending protection was provided by a decentralized peer-to-peer protocol for verifying and tracking the transactions. In simple words, Bitcoins are “mined” for a reward using the proof-of-work mechanism by miners and after verified by the decentralized nodes in the network.
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