If you have been following along at home you have certainly heard us mention blockchain one or two times. Read below to learn all about this technology.
Who created blockchain technology?
Blockchain technology first came about in 2008. A Japanese individual (?) by the name of Satoshi Nakamoto was responsible for creating the first blockchain and inventing Bitcoin. At least it might have been an individual, or perhaps it was several, as the true identity of this individual(s) has never been determined or released. There is still to this day much speculation about the real identity of Satoshi Nakamoto.
Why was blockchain technology created?
The term ‘decentralization’ is used a lot when it comes to all things blockchain, crypto, or NFTs. And it really is the pillar on which blockchain was built. ‘Decentralization’ is defined as ‘controlled by several local offices or authorities’ rather than one single one. Prior to 2008, almost everything in life was governed by a single individual, authority, organization or entity, or a group thereof. The way blockchain works is to take that authority from a single entity and give it instead to a network of entities, or nodes, as they are referred to. The theory behind this is that a decentralized network is harder to corrupt, or some would say nearly impossible. This system of recording information also lends itself to greater transparency, diversification, and accessibility.
How does it work?
Blockchain technology was initially created to verify financial transactions, transactions using cryptocurrency, and initially, it was all for Bitcoin. Where a bank or financial institution would keep a record of all financial transactions so a blockchain does the same. When one individual wishes to make a transaction a block is created. That block is then sent out to the network to verify. If everyone agrees with the transaction terms (i.e party a transfers x amount to party b) then the transaction is validated and the block is added to the chain. And that chain is publicly available for anyone on the network to view. Euromoney has one of many helpful images to explain this process further, see below. Nowadays however this technology has many more applications, such as asset transfer, such as NFTs, data/information sharing, medical recordkeeping, monitoring supply chains, copyright and royalty protection, and food safety just to name a few.
Whilst this is a very brief overview if you are looking to delve into the world of blockchain technology, NFTs, and cryptocurrency further be sure to follow Fauna NFTs journey! And for some additional reading, we’ve included some helpful references below – check out these sites which break down blockchains:
Dummies ‘taking on complex concepts and making them easy to understand’
Lets Do DeFi ‘Guides Grandma can follow‘
Investopedia ‘simplyfying financial decisions and information’.