When you want to understand the opportunities and potential of Blockchain technology, you can only start from the Bitcoin protocol. The link between these two worlds is most solid.
And it could not be otherwise. Bitcoin is the primary cryptocurrency created as well as marketed that uses Blockchain technology for its operation. It is to this digital currency that Blockchain and Distributed Ledger technologies owe their luck. The romance of Bitcoin is therefore also the history of Blockchain. In this article we will try to retrace it, in a journey that is far from without twists.
Blockchain and Bitcoin: the story of the first cryptocurrency in six stages
Before telling the evolution of Bitcoin, however, a necessary premise: what exactly are Bitcoins? We talked about it in a recent article in which we highlighted the functioning, main features and critical issues, with an eye to the new platforms that "promise" to overcome the limits of Bitcoin and to evolve the world of cryptocurrencies and, more generally, that of the Blockchain.
To learn more: How Bitcoin works, pros and cons of the first cryptocurrency
Bitcoin: from idea to reality
Bitcoin was born in late 2008, when person or group of people whose identity is still unknown - publishes a white paper explaining his idea of peer-to-peer cryptographic virtual currency without intermediaries, governed by algorithms. The proposed idea is a real declaration of war on the banking world, which in that period had been overwhelmed by a profound crisis. In 2009 the Bitcoin network starts operating; the community begins to grow and bitcoin is used for the first time to purchase an asset in the physical world: a pizza. In 2012 Bitcoin reaches the capitalization of 1 billion dollars.
The first reports with the press and regulators
However, the first problems arise. At first (2010-11) Bitcoin, due to its use of pseudonyms and the absence of a supervisory authority, is associated with the illegal market , from drugs to terrorism, and for this reason it is relegated to a niche phenomenon of little interest for the business world.
The regulators of different nations begin to wonder at this point as to be regarded as Bitcoin, some recognize it as a currency, as some financial instrument and others forbid it, or they are not safe for use on banks. Click on Allin1Bitcoins - One Stop Place for Traders to know more.
From Bitcoin to Blockchain
From 2014 a phase opens in which the interest begins to move towards the technology behind Bitcoin: the Blockchain. Platforms that exploit some of the founding principles of Bitcoin are starting to emerge: Ethereum, a platform aimed at creating smart contracts; Ripple, a platform created in 2012 to facilitate interbank payments in different currencies, which collects membership from the first banks.
In 2015 R3 was also born, a consortium made up of the most important world banks, which develops the Corda platform. Also in 2015, the Linux foundation begins to work on the Hyperledger project for the collaborative development of a platform that can also be used by companies. We therefore come to a crossroads: there are those who believe only in cryptocurrencies and those who believe that the underlying technology can also be applied to other areas.
Blockchain becomes a trend
In 2016 the fashion of the Blockchain is affirmed. The press begins to talk about it and is increasingly presented in clear separation from Bitcoin (at the end of 2015 The Economist dedicates the cover to it and includes it among the technologies that will revolutionize digital in the coming years ). As a consequence of this media hype, companies' awareness of the Blockchain begins to increase and numerous experiments start.
Blockchain and cryptocurrencies between oscillations and perplexities
The first doubts arise about the revolutionary potential of this technology which is struggling to realize the promises made. Cryptocurrencies continue to fluctuate in their value, becoming increasingly an instrument of financial speculation. The validation process of the Bitcoin network has some limits to the growth of the network: slowness in carrying out a transaction, high energy consumption for validation and risk of centralization of the computers dedicated to this activity.