>> Blockchain is often referred to
as a decentralized and secure ledger.
You might hear that and think,
what does that mean anyway?
Don't worry, I'll get into all that and provide
a clear and concise description.
In this video, I'll explain exactly what
blockchain technology is and how it came to be.
Putting it simply, blockchain is literally
a chain of blocks that securely stores
data about transactions and
events that happened within one blockchain network.
You can think of it as a database or
a collection of data that is decentralized,
meaning everyone stores a copy and can read to and write from it.
A blockchain is different from a traditional database,
because all the data is not stored in one central location,
instead, a record of the ledger is stored amongst
participants and they can verify
all of the data that is being added.
You can think about it as a database but
without any single administrator and instead,
everyone has an admin privileges.
Having multiple copies of the database among
participants and decentralized authority,
describes the concept of
the distributed ledger technology which blockchain is built on.
A distributed ledger is really
just a database spread across multiple locations or participants.
Blockchain builds on top of that by implementing
a data structure as a chain of blocks,
and enforces a secure way to make and verify transactions.
Blockchain transactions can be public or
private and have many participants from around the world,
who do not know one another or do not
trust one another but still work together.
This is possible because there are
consensus algorithms that define how to
come to an agreement and make transactions in a safe and easy way.
Transactions between participants are secure and
require that they are verified
before adding new blocks to the block chain.
Additionally, all transactions are linked in
the blockchain and provide full transparency,
by allowing all participants to view
transactions from the beginning of the blockchain history.
Blockchain technology was created in 1991.
It was created by two researchers and computer scientists,
who wanted a way to create
a timestamp system that was reliable and cannot be tampered with.
Others then built off this idea and explored
the currency system that would allow
transactions between parties in a secure way.
There was bit gold which combine elements of
cryptography and mining for new currency,
there was eCash which was a cryptographic electronic cash system,
proof-of-work is the original consensus algorithm
to achieve trust in a network,
and Hashcash, a proof-of-work system
to limit risk and denial of service attacks.
But it wasn't until 2009 that we
really solved the first globally used case with Bitcoin.
Bitcoin is a system where everyone can
participate, transactions happened securely,
participants are encouraged to get involved by trading,
and where transactions that get added to the blocks in
the blockchain are all verified by other participants.
Here is also a real conspiracy model,
where only 21 million Bitcoin where ever be in production.
The Bitcoin network will
automatically adjust to keep things consistent.
Bitcoin is built off of blockchain technology,
but again, it was just the first major use case that emerge.
We'll get into more Bitcoin history in a later video but for now,
let's talk a bit about how blockchain has evolved
and start that one over.
Bitcoin is built off of blockchain technology,
but again, it was just the first major used case that emerged.
We'll get into more blocks in history
in a later video but for now,
let's talk a bit about how blockchain has
evolved examining different phases.
Blockchain 1.0 is all about cryptocurrency.
This includes cryptocurrency blockchains
like Bitcoin and Ethereum,
which are the most popular options.
Since the popularity of Bitcoin grew,
we have seen a flux of cryptocurrencies emerge as a result.
Blockchain 2.0 is about smart contracts.
For cryptocurrencies like Ethereum,
you can program agreements or contracts between parties.
What do 3.0 is decentralized applications or DFS for short?
The apps are built around smart contracts and
create an interactable interface.
Blockchain 4.0 will be all about making
blockchain usable in multiple industries,
and it's exciting time as we start to see
blockchain being adopted in
nearly every major industry around the world.
As we progress through this series,
consider the history of blockchain,
the core principles, and start to think about how
it will continue to evolve and be used in the future.
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