The history of blockchain technology began in the late 1970s, when information scientist Ralph Merkle patented the concept of a hash tree or Merkle tree. These trees represent a structure of data stored in cryptographically linked blocks. In the late 1990s, Stuart Haber and W. Scott Stornetta used Merkle’s trees to create a system in which document timestamps cannot be tampered with. This event was a breakthrough in blockchain history.
The technology has continued to evolve over the past three generations.
First generation – Bitcoin and other virtual currencies
In 2008, an unknown person or group of people under the alias Satoshi Nakamoto embodied blockchain technology in its modern form. Satoshi limited the size of blocks of information to 1 MB for Bitcoin transactions. Even today, many of the capabilities of Bitcoin systems remain central to blockchain technology.
Second Generation – Smart Contracts
A few years after the emergence of the first generation currency, developers decided to consider the use of blockchain not only within cryptocurrencies. For example, the inventors of Ethereum decided to use blockchain technology in asset-transfer transactions. A significant contribution was the possibility of using smart contracts.
The third generation is the future
As companies adopt new applications, blockchain technology continues to improve. Companies are overcoming the limitations of scale and computation, and the potential for blockchain development is limitless.