Part 9: Blockchain definition, use case, and history


.The message of this chapter is simple: explain what the blockchain is all about. So, the blockchain is an architecture centered on cryptography and built atop the internet protocol, powered by interconnected computer servers that do not require developer setup, embodying a sophisticated blend of hardware and software. This technology extends beyond its foundational capabilities, incorporating a software approach that unifies this hardware infrastructure.

Blockchain is dedicated to achieving consensus through a universal validity check system. This system, a cornerstone of decentralized verification architectures, employs validation methods such as Proof of Work (PoW) and Proof of Stake (PoS), highlighting blockchain's multifaceted attractiveness and pivotal role in enhancing secure, decentralized digital transactions.

Here, I am sharing some basic details about available consensuses:

  • Proof of Work (PoW): The original consensus mechanism used by Bitcoin, where miners solve complex mathematical puzzles to validate transactions and create new blocks. Despite criticisms over energy consumption, Bitcoin remains the most famous implementation of PoW, demonstrating its security and decentralization benefits.
  • Paxos: A protocol for achieving consensus among distributed systems or networks.
    It is not directly applied in mainstream public blockchain projects but is foundational for developing blockchain consensus mechanisms.
  • Proof of authority (PoA): A reputation-based consensus algorithm where pre-selected validators validate transactions based on their identity and reputation. VeChain is a prominent blockchain that employs PoA, highlighting its efficiency and suitability for private blockchain networks and applications requiring high transaction throughput
  • Proof of burn: This consensus mechanism involves validators burning some of their tokens to obtain the right to mine or validate block transactions. The idea is that by committing resources via burning, validators are invested in the network's success. Slimcoin is one example of a project utilizing PoB.
  • Proof of personhood: This consensus mechanism assigns one vote per verified human to prevent Sybil attacks and ensure democratic participation within a network. Projects like Democracy Earth and Idena explore this concept, focusing on democratic governance and identity verification.
  • Proof of space (PoSpace): A mechanism where participants prove they allocate unused disk space to the network to mine or validate block transactions, as seen in Chia Network. This approach aims to be more energy-efficient compared to traditional proof-of-work systems
  • Proof of stake (PoS): A consensus mechanism that allows block validation based on the amount of cryptocurrency a validator stakes as collateral. Ethereum's transition to PoS with its Ethereum 2.0 upgrade is a leading example of this consensus model, emphasizing energy efficiency and scalability.
  • Proof of elapsed time (PoET): Employed by Hyperledger Sawtooth, PoET is a consensus mechanism designed for permissioned blockchain networks. It ensures fair participation in the blockchain by using a lottery system with a random wait time for each participant, thus minimizing resource consumption.

Then, other verification software elements must be part of any decentralized network to reach cryptographic privacy and authentication. Let's use Bitcoin again as a leading example.

The Bitcoin Core developers sign all their releases using the "Pretty Good Privacy" (PGP) encryption program that provides cryptographic privacy and authentication for data communication. PGP is used for signing, encrypting, and decrypting texts, e-mails, files, directories, and whole disk partitions and to increase the security of e-mail communications. End-users can download the software and signatures and verify the releases using PGP software running on their own machines. In this particular verification, blockchain is not necessary.

Now, since we looked at how, for example, Bitoinc is structured, we can state what the blockchain actually is.

In many respects, blockchain can be considered a meta-technology since it utilizes, enhances, challenges, and potentially supersedes other pre-existing software technologies. As such, it allows us to create versatile technological solutions that aim to minimize the agency of third-party providers and, in a way, return power back to the users. This can be achieved by the blockchain providing an environment where users can interact freely in a trustless ecosystem for very low to almost zero fees at speeds that make everybody in the world reachable in a matter of minutes. To make this possible, the blockchain is used as a transaction platform and distributed accounting ledger that uses cryptocurrency tokens (digital money) to represent a specific value at the current time (much like traditional fiat currencies). Nevertheless, for trustless technology to work globally, it needs to implement trust differently. This is where ISO standards come into the picture, as they ensure that blockchain interactions follow globally applicable rules, norms, and procedures. This is also why, starting in 2016, blockchain technology obtained its own set of ISO standards, called ISO/TC307.

From the perspective of a technician, the blockchain is:

  • A transactional platform and distributed accounting ledger using cryptocurrency tokens as a representation of a specific value at the current time (same as fiat). That means that the blockchain nodes carry out a transaction, and every member of this blockchain party has a copy on their computer (node). Everybody verifies if the entities that are about to do a transaction have enough funds to make this transaction happen. You are basically announcing to all members of this system that you are about to make something happen, and even though this action is happening between two peers, the rest of the network verifies and records the transaction.
  • It is a computing infrastructure that uses the power of the decentralized database with a linear cell-space structure, published semi-publicly (also known as "the block"). It's an open-source software operating on a development platform of the future. The trust service layer, combined with the Peer to Peer (P2P) network, handles microtransactions and large-value transactions, allowing two users to do the same things a bank would need to do on their behalf.
  • That's right, instead of a middleman or third party (such as a bank or PayPal service…), you and only you are the master of your transaction registers and how you do it. This is all possible because more people realize there's a way to do things differently. Because the blockchain transaction is borderless, you don't need to think about where your friends are when you are about to send them some money - and with very low fees, to boot!

"Fees are not necessarily low on blockchains. There are times when on-chain transactions are quite expensive! And of course, "low" is a relative term as well; what may be low for some is expensive to others and vice versa." - John Light

It provides:

  • The use of cryptocurrencies is the blockchain's most famous derivative.
    • Bitcoin is the most crucial contribution to blockchain technology of all time.

From the evangelist perspective, the blockchain provides:

  • A suitable environment for running decentralized financial service marketplaces. A layer that creates a borderless opportunity for anybody to join a technological and financial revolution.

To finish on a poetic note, blockchain sounds like a song of the future. It can be described as an innovative digital splendor with a strong narrative that can influence the global direction of finance, data integrity, and how people control their credentials.

What is needed to run a blockchain?

  • Internet
  • Electricity
  • Software algorithms
  • Hardware (miners)

Blockchain as a helping hand

Some economies are still catching up but accepting innovative technologies that are easy to adapt and can supply those regions with proper financial substitutions, fostering real and fast progress.

In some regions, people are trying to improve their situation and develop their businesses while struggling with a lack of government support and FinTech adoption. Overcoming those problems is one of the main hallmarks of blockchain technology and cryptocurrencies, as people can use them to bypass obstacles posed by overbearing authorities to achieve their goals, such as having a money account or credit score.

  • Indonesia: Small-medium Indonesian enterprises lack access to fundamental financial technologies like personal banking or cloud-stored accounting. This, in turn, makes it difficult for such companies to provide a formally valid and reliable record of business and trade credibility. All those facts make financial institutions reluctant to provide a loan when governments cannot offer economic support. To exacerbate the problem, small businesses are struggling to join existing marketplaces dominated by large established companies that already control the market through great amounts of business know-how and customer loyalty.

    Most Indonesian internet traffic is mobile, and only about a third of the population has a bank account.

A possible blockchain solution

We can relate to Indonesia's excitement over mobile internet/app usage. This is especially handy since people in many places worldwide don't have access to a standard PC with a fixed or wireless internet connection. This is an obstacle for them when it comes to making records, accessing financial institutions services, and communicating with partners.

Instead of a PC with an internet connection, they could use smartphones and mobile data from mobile network providers since there is excellent coverage in places like Indonesia. Mobiles could solve the problem of the lack of traditional fixed infrastructure, and a blockchain-based application could embrace and encompass all possible applications under one roof. A publicly accessible profile, representing identity management between the users and institutions originating from this fusion, could be used to verify a user's creditworthiness and define their business profile (identity).

In some countries, this potential for financial self-sufficiency of individuals is looked down upon by the government, and cryptocurrencies are thus considered illegal. However, there are also countries, such as Estonia, where the government has accepted and endorsed using blockchain and cryptocurrencies as a medium in green energy procurement and trading platforms. Inevitably, their economies have benefited as a result. After all, this technology has not been invented to make people rich but to make what we do more fluent, secure, and, in some parts of the world, actually possible.

  • Estonia: Tokenized energy from natural resources (WePower)

Blockchains allow people to be their own banks in systems where they cannot have a bank account, making it impossible to provide fraudulent proof of the authenticity of goods and preventing double-spending in digital transactions. The proprietary technology this solution could utilize is, for example, NFC-compatible chips, which could be discretely incorporated with any physically manufactured product. Upon chip integration, the product is paired with the digital counterpart on the blockchain. Verification of authenticity is instantaneous with a simple tap or scan with any smart device. This way, any goods would have a record of their purchase on the blockchain and protect the ownership, which could be updated with every secondary market action that could happen to the goods and transfer that ownership to a new owner. This bears striking similarity with the use of NFT tokens and art. This method would protect the "non-fake" background of the chipped goods, the same way as proving the buyers' ownership.

Still, there are many other aces this technology can pull out of its sleeves.

  • Everywhere it is needed: Decentralized Finance (DeFi) as the alternative to standard centralized financial products backed by banks. In this system, you can be the loaner and the borrower without adhering to the wishes of central banks. At the same time, the users are in full control of their assets and responsible for managing and safekeeping their private keys.

For some, blockchain is still nothing more than an idea that accidentally made some people rich. On the other hand, if we free ourselves from this bubble perspective, we will realize that blockchain is helping millions of users worldwide access previously unattainable possibilities that are forbidden by their countries.

Additional example

  • Afghanistan: The cooperation of three companies resulted in a system for a land registry secured by blockchain technology.

Why does the world need blockchains?

For decentralized money and finance.

Consider the following:

  • Roads need traffic lights.
  • Modern states would fail without the rule of law.
  • Every important technological field, such as the economy, health care, and medicine, needs ISO standards.

These standards declare the correct limits, values, procedures, and quality evaluation methods.
In the same way, a technology world needs ISO to keep things auditable and safe, a homegrown economy based on scarcity, and a decentralized, permissionless, borderless financial-economic system needs blockchains.

"Trusted standards mean that industry doesn't need to reinvent the wheel, that innovations will be compatible and work with existing technology, and that products and services will be trusted, too. Governments use standards as trusted solutions to complement regulation, and they give peace of mind to consumers who know they are not putting themselves or their families at risk." - Acting ISO Secretary-General Kevin McKinley

To extend the above wheel analogy further, the use of the wheel as an instrument was initially very limited but eventually permeated through every aspect of the Industrial Revolution and the world it created. In many ways, the internet is the new wheel, and the blockchain is its pneumatic tire - an enhancement to make the wheel even more useful and ubiquitous. Nevertheless, there is still some uncertainty about how innovative an aspect this technology can prove for the IT infrastructure of the future. Much will depend on what can be built on or around blockchain technology. Implementing blockchain-based solutions to systems that deliver ISO standards globally is a great step towards adopting blockchain technology thoroughly. Some may not believe the blockchain could escape the pitfalls of being "just another technological buzzword." However, since this technology is starting to permeate areas like ISO, banking, and identity protection, many have already begun to pay closer attention. Still, the most important phenomenon born from the blockchain to date has been Decentralized Finance (DeFi) and the freedom of finance for self-sovereign identities it brings. Thanks to DeFi, even the erstwhile blockchain skeptics now wonder, "What is this blockchain I keep hearing about??!" and "How do I buy it?!".

The massive adoption of blockchain technology during the DeFi season of 2020-2021

Decentralized finance, or DeFi, is a cryptocurrency use case recently attracting significant attention. DeFi refers to financial services using smart contracts, which are executed by miners with a transaction when certain conditions are met. Smart contracts are automated agreements that do not need intermediaries, such as banks or lawyers, and instead use online blockchain timestamping as proof of authority. With cryptocurrencies, there are no restrictions related to wealth, social status, religion, etc. Almost everyone can permissionlessly and pseudonymously access and use DeFi applications. This is an advantage for those who cannot access traditional financial services because of the lack of formal documentation or the absence of such services in their country. Also, the current conditions and captivating rate of Annual Percentage Yield (APY) attract various investors to DeFi ecosystems every day.

Between September 2017 and September 2020, the total value locked up in DeFi contracts has grown significantly, from $2.1 million to $6.9 billion (£1.6 million to £5.3 billion). Since the beginning of August 2020 alone, its rise has grown even faster, and as of April 2021, it stands above $45 billion (£32 billion).

DeFi, from the regulatory perspective

An important question from a regulatory standpoint is, "Are cryptosystems money transmitters or money service businesses?". This is because money transmitters are regulated differently than other finance systems.

Money transmitters - FinCEN's definition

  • "Any person, whether or not licensed or required to be licensed, who engages as a business in accepting currency, or funds denominated in currency, and transmits the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution, a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both, or an electronic funds transfer network; or
  • Any other person engaged as a business in the transfer of funds"

An entity that receives money from one person and transmits that money to another person or location. This entity needs to be registered with FinCEN and is required to have an anti-money laundering compliance program, including the "Know Your Customer" procedure and KYC.

DeFi - A money-service business that is not a money transmitter

Non-custodial DeFi systems - like Sovryn - do not take possession of your funds. A single entity does not control them or hold transactional control over users' funds. Using smart contracts to distance DeFi platforms from the ownership of the funds being used causes a regulatory grey area in most jurisdictions. Therefore, the system is not currently classed as a regulated financial institution, but its users can be regulated in other ways, such as being taxed on profits or having limits on fiat on/off-ramps.

Why are blockchains a good solution?

Traditionally, electronic security focuses on authorization, authentication, and access control. These mechanics are intended to keep unauthorized users from accessing or modifying data. However, on the application or system level, it does not provide any protection regarding authorized access. Blockchains enable tamper resistance for data through distribution over many systems that are run and managed by independent parties. This is ensured by the blockchain architecture, where every piece of data has thousands of globally distributed copies. A potential attacker intent on breaching the certificate would have to compromise the majority of the data distribution at the same time, which is extremely hard, expensive, and, with a well-designed blockchain, almost impossible.

To reiterate, a blockchain is a versatile solution for various real-world use cases, and it is up to innovative minds how soon and how extensively this "pneumatic tire" of the internet will be used for the betterment of many walks of modern life.

Data integrity

Blockchains can be the solution to improve data integrity to the highest possible standard. By design, blockchains are inherently resistant to the modification of data. Blockchain ledgers are designed to be immutable, meaning that if a data addition or transaction has been made, it cannot be edited or deleted without great difficulty (e.g., the cost to re-organize the Bitcoin blockchain). This means that what is put on the blockchain stays on the blockchain as long as the data owner requires updating it. Then, this updated information is distributed between thousands of computers that create a blockchain network.

Blockchain blocks are:

  • structures for data-keeping
  • the timestamping mechanism for these data structures

Blockchains provide:

  • a proof of the history of any data recorded on a blockchain
  • data integrity that can be used for audits, regulatory compliance requirements, or legal challenges
  • decentralized data distribution with a transparent transaction history

Trusted Timestamping

In the context of blockchain, you can specifically encounter a term called Trusted Timestamping. This is a process of securely keeping track of a document's creation and modification time, and it is an indispensable tool in the business world. It allows interested parties to know, without a doubt, that a document in question existed at a particular date and time. By design, a Bitcoin transaction includes a date and time on the blockchain. By including a cryptographic digest of a file, you can later certify that the data existed then.

Important Blockchain and Bitcoin milestones

  • 1976: An asymmetric key cryptosystem was published by Whitfield Diffie and Martin Hellman, who, influenced by Ralph Merkle's work on public key distribution, disclosed a method of public-key agreement. This method of key exchange, which uses exponentiation in a finite field, came to be known as Diffie–Hellman key exchange. This was the first published practical method for establishing a shared secret key over an authenticated (but not confidential) communications channel without using a prior shared secret. Merkle's "public key-agreement technique," known as Merkle's Puzzles, was invented in 1974 and only published in 1978.
  • 1982: Dissertation "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups" is the first known proposal for a blockchain protocol. Complete with the code to implement the protocol, Chaum's dissertation proposed all but one element of the blockchain, later detailed in the Bitcoin whitepaper.
  • 1993: The PoW concept was invented by Cynthia Dwork and Moni Naor as a way to deter denial-of-service attacks and other service abuses, such as spam on a network, by requiring some work from a service requester, usually meaning processing time by a computer. The term "proof of work" was first coined and formalized in a 1999 paper by Markus Jakobsson and Ari Juels.
  • 1995: DigiCash created the first digital currency with eCash (an electronic cash application that aims to preserve a user's anonymity and inventing many cryptographic protocols like the blind signature, mix networks, and the Dining cryptographers protocol)
  • 1993: Hal Finney in 1993 talking about digital trading cards
  • 1994: Smart contracts ancestors were first introduced as "Ricardian Contracts'' by Nick Szabo, a computer scientist, legal scholar, and cryptographer. The term "smart contract" was first introduced long before the invention of Bitcoin, but it underwent a long gestation period of inactivity and disinterest since there was no platform that could enforce a smart contract, until the advent of Bitcoin blockchain technology in 2009.
  • 1998: Computer scientist Nick Szabo works on 'bit gold,' a decentralized digital currency
  • 2000: Stefan Konst publishes his theory of cryptographically secured chains, plus ideas for implementation.
  • 2008
    • Invention of cryptocurrency
    • Developer(s) working under the pseudonym Satoshi Nakamoto released a white paper establishing the model for a blockchain.
      • 31 October: Bitcoin white paper published on the internet
  • 2009
    • Nakamoto implemented the first blockchain as the public ledger for Bitcoin transactions.
      • Later that year, → Blockchain was the first time operable.
    • January 3 - Satoshi Nakamoto mined the genesis block of Bitcoin (the first block) for 50 bitcoins
    • January 9 - The first open-source Bitcoin client was released on SourceForge
    • January 12 - The first bitcoin transaction was made of 10 bitcoins to the first bitcoin user (other than Satoshi), Hal Finney
    • November 19 - Satoshi created the site.
    • November 22 - Satoshi Nakamoto posted the first post on the Bitcoin forum using the account "satoshi"
    • December 16 - Bitcoin version 0.2 is released. By this point, Martti Malmi has joined Satoshi Nakamoto, a developer with full permission to change the codebase.
    • December 30th - The first difficulty increase occurs, from 1 to 1.18
  • 2010
    • February 6 - A currency exchange is born. The Bitcoin Market is established by dwdollar as a Bitcoin currency exchange.
    • March 17 - The now-defunct exchange was the first one that started trading with cryptocurrency.
    • May 22 - Mr. Sturdivant filled the order for two large pizzas from Papa John's, paid by 10,000 BTCs, making this transaction the first physical purchase ever made with Bitcoin in history. In May of 2021, this amount of BTC was worth 367,991,000.00 USD: See the TX
    • July 6 - Bitcoin version 0.3 was released.
    • November 6 - Bitcoin market capitalization passes $1 million.
    • December 9 - The mining difficulty exceeds 10,000
    • December 12 Satoshi Nakamoto posted his last post on the BitcoinTalk forum.
  • 2011
    • January 2 - Tonal Bitcoin, designed for those who prefer the Tonal number system, standardized its units.
    • May 9 - The launch of Bitbills is announced. Bitbills are the first physical incarnation of bitcoins, in plastic cards containing cryptographic information.
  • 2012
    • January 15 - Bitcoin made an appearance in the show "The good wife" in the episode "Bitcoin for Dummies"
    • September 27 - The Bitcoin Foundation was launched to implement a core development team for the protocols and the body to oversee the digital currency.
    • June 3 - Bitcoin confirmed its largest transaction to date with 1322 transactions on block 181919
    • November 28 - Bitcoin Halving Day. On Halving Day, Block 210,000 is the first with a block reward subsidy of 25 BTC.
  • 2013:
    • QixCoin, a Turing-complete cryptocurrency, was created by some RSK founders. QixCoin introduced the concept of pay-per-execution, currently known as transaction "gas." However, RSK inherits several key concepts from Ethereum, such as its account format, VM, and web3 interface.
    • January 22 - BitPay surpasses 10,000 transactions. BitPay, a Bitcoin payment processing company, announces that it has surpassed 10,000 Bitcoin transactions for its merchants, with no cases of payment fraud reported.
    • February 15 - The bitcoin-based payment processor Coinbase reported selling US$1 million worth of bitcoins in a single month at over $22 per bitcoin.[41] The Internet Archive announced that it was ready to accept donations as bitcoins and that it intends to give employees the option to receive portions of their salaries in bitcoin currency.
    • On February 19 - Version 0.8 of the Bitcoin client was released. It features Bloom Filtering and improved download speed.
    • On February 21 - the Internet Archive began accepting BTC donations so that its employees could be paid in Bitcoins.
    • Mar 12 - A hard fork occurs on the blockchain. A protocol rule that was previously undiscovered results in a hard fork of the 0.8.0 reference client.
    • March 18 - the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury, issued a report regarding centralized and decentralized "virtual currencies" and their legal status within the "money services business" (MSB) and Bank Secrecy Act regulations. It classified digital currencies and other digital payment systems, such as Bitcoin, as "virtual currencies" because they are not legal tender under any sovereign jurisdiction.
    • March 28 - The total Bitcoin market cap passed US$1 billion.
    • May 1 - Online gaming company ESEA is called out for secretly using customer computers to mine Bitcoins.
    • May 2 -  The first Bitcoin ATM in the world debuted in San Diego, California.
    • May 3 - Coindesk, a bitcoin-focused resource and news website, was launched by Shakil Khan, an angel investor and advisor to Spotify.
    • May 17 - The first major Bitcoin Conference was held at the San Jose Convention Center.
    • December 5 - The People's Bank of China announced in a press release regarding bitcoin regulation that whilst individuals in China are permitted to freely trade and exchange bitcoins as a commodity, it is prohibited for Chinese financial banks to operate using bitcoins or for bitcoins to be used as legal tender currency, and that entities dealing with bitcoins must track and report suspicious activity to prevent money laundering.
  • 2014: Blockchain technology is separated from the currency, and its potential for other financial, inter-organizational transactions is explored. Blockchain 2.0 was born, referring to applications beyond currency. The Ethereum blockchain system introduces computer programs into the blocks, representing financial instruments like bonds.
  • 2015: Ethereum launched - its first 2.0 blockchain system (but It's not even the first cryptocurrency to have a Turing-complete language, which was QixCoin).
  • 2016
    • World Economic Forum - first governance models through blockchain
    • IBM opened an innovative blockchain research center and started development with an umbrella product called Hyperledger Fabric.
    • Blockchain has its own set of ISO standards, called ISO/TC307
    • The "Dubai Blockchain Strategy 2021" project launched
  • 2017
    • 15% of global banks use blockchain for intercommunication
    • March 2 - The day when one Bitcoin overtook the price of an ounce of gold.
    • July 21 - SegWit was locked in by Bitcoin miners
    • August 21 - SegWit was activated
    • December 6 - Lightning Network preview was released
  • 2018
    • July 17 - 2018, MasterCard accepted the agreement to participate in cryptography
    • Emirates Blockchain Strategy launched
  • 2021
    • The cooperation of three companies resulted in a blockchain-based land registry for Afghanistan
    • Sovryn developed the Bitcoin-native DeFi protocol that allows Ethereum and Binance Smart Chain users to experience the most feature-rich platform directly on the Bitcoin-native RSK blockchain.
    • El Salvador became the first country in the world to officially classify Bitcoin as a legal currency.
      • June 16 - The World Bank has rejected a request from El Salvador to help implement Bitcoin as legal tender.
    • Blockchain Protocols Development: Ethereum maintained its position as the most actively developed blockchain protocol, with a significant number of weekly commits and a substantial monthly active core developer count. Other protocols like Cardano, Hyperledger, Polkadot, Cosmos, and Avalanche also saw considerable activity, indicating a vibrant ecosystem for blockchain development.
    • Growth in Decentralized Finance (DeFi): The DeFi sector witnessed remarkable growth, with platforms like Maker, Gnosis, Synthetix, Aave, and Bancor leading in terms of development activity. This trend highlighted Ethereum's pivotal role in supporting DeFi applications​.
    • Blockchain Gaming and NFTs: 2021 was a banner year for blockchain gaming and NFTs, with a significant uptick in integrating blockchain elements like tokens and NFTs into games. This integration has led to the emergence of a new niche of play-to-earn (P2E) and NFT games, with Axie Infinity and Splinterlands among the standout successes. These developments underscored the rising popularity and acceptance of the P2E model within the global gaming market.
    • Expansion of the Blockchain Game Alliance (BGA): The BGA saw its membership grow by 186% from the previous year, indicating strong interest and investment in blockchain gaming. The alliance's survey highlighted key insights on the adoption of blockchain in gaming and the prospects of play-to-earn models.
  • 2022
    • Kaspa launched their mainnet with the GhostDAG protocol and announced the continuation of the ultimate PoW consensus called DAGKnight.
    • Kaspa core contributors proposed and applied several solutions to blockchain trilemma, and their use of DAGs in PoW led to the creation of a new metatechnology for blockchain called BlockDAG.
    • Blockchain-as-a-Service (BaaS) Adoption: There was a notable increase in the adoption of BaaS solutions, enabling businesses to utilize cloud-based blockchain services for more efficient operations. Major players in this domain included Microsoft, Amazon, and R3.
    • Demand for Blockchain and Crypto Skills: The blockchain sector saw an increased demand for skilled professionals, driven by the industry's growth and the broader application of blockchain technology across various sectors
    • Blockchain-IoT-5G Integration: 2022 witnessed efforts to integrate blockchain technology with the Internet of Things (IoT) and 5G networks to address security and scalability challenges in the IoT ecosystem.
    • Blockchain and the Metaverse: The year saw blockchain playing a crucial role in the development of the Metaverse, with digital assets like NFTs defining ownership and cryptocurrencies powering digital economies within these virtual environments​
    • Blockchain in Governments: Governments worldwide started to explore and implement blockchain for various administrative and operational processes, recognizing its potential for improving efficiency and transparency.
    • CBDCs (Central Bank Digital Currencies): The exploration and development of CBDCs continued to gain momentum, with several countries conducting pilots and launching digital currencies to modernize their financial systems.
    • DeFi (Decentralized Finance) and NFTs (Non-Fungible Tokens) Growth: The DeFi sector continued to expand, and NFTs saw further development and adoption, impacting various industries, including gaming, music, and digital art.
    • Introduction of CBDCs and Digital Rupees: Many countries, including India, progressed with their CBDC initiatives, conducting trials and laying the groundwork for digital versions of their national currencies.
  • 2023
    • Kaspa's GHOSTDAG: For the first time in blockchain history, a pure Proof of Work protocol has carried THOUSANDS of transactions per second across dozens (maybe hundreds) of network nodes in a permissionless network running on affordable hardware.
    • Major Advancements in Zero-Knowledge Technology: A series of zero-knowledge rollups, including zkSync Era and Polygon's zkEVM, were launched, enhancing blockchain efficiency by executing more transactions off-chain while maintaining privacy and security.

    • Enhanced Blockchain Interoperability: Developments like Chainlink's Cross-Chain Interoperability Protocol (CCIP) and partnerships between LayerZero and major companies such as Google Cloud and JPMorgan significantly improved blockchain interoperability, enabling seamless asset transfers across different blockchains.

    • Tokenization of Real-World Assets: Efforts to bring more real-world assets on-chain through tokenization gained momentum, with platforms like Centrifuge, Maple Finance, and Goldfinch leading the way in using assets such as cash, gold, and real estate as collateral in DeFi protocols.

  • 2024
    • The U.S. Securities and Exchange Commission approved the sale of spot bitcoin exchange-traded products, allowing for a new type of investment vehicle that holds bitcoins and can be traded on the stock market, marking a significant step towards mainstream financial integration of blockchain assets.
    • U.S. Rep. Tom Emmer introduced the Blockchain Regulatory Certainty Act, which seeks to create legal clarity for blockchain developers and service providers not holding consumer funds, indicating a move towards more defined regulatory frameworks for blockchain technology.

The end.

Congratulations. You made the ninth step in becoming a blockchain expert.