The idea behind blockchain technology was described as early as 1991 when research scientists Stuart Haber and W. Scott Stornetta introduced a computationally practical solution for time-stamping digital documents so that they could not be backdated or tampered with.
The system used a cryptographically secured chain of blocks to store the time-stamped documents and in 1992 Merkle trees were incorporated to the design, making it more efficient by allowing several documents to be collected into one block. However, this technology went unused and the patent lapsed in 2004, four years before the inception of Bitcoin.
In 2004, computer scientist and cryptographic activist Hal Finney (Harold Thomas Finney II) introduced a system called RPoW, Reusable Proof Of Work. The system worked by receiving a non-exchangeable or a non-fungible Hashcash based proof of work token and in return created an RSA-signed token that could then be transferred from person to person.
RPoW solved the double spending problem by keeping the ownership of tokens registered on a trusted server that was designed to allow users throughout the world to verify its correctness and integrity in real time.
In late 2008 a white paper introducing a decentralized peer-to-peer electronic cash system - called Bitcoin - was posted to a cryptography mailing list by a person or group using the pseudonym Satoshi Nakamoto.
On the 3rd of January 2009, Bitcoin came to existence when the first bitcoin block was mined by Satoshi Nakamoto, which had a reward of 50 bitcoins. The first recipient of Bitcoin was Hal Finney, he received 10 bitcoins from Satoshi Nakamoto in the world's first bitcoin transaction on 12 January 2009.
In 2013, Vitalik Buterin, a programmer and a co-founder of the Bitcoin Magazine stated that Bitcoin needed a scripting language for building decentralized applications. Failing to gain agreement in the community, Vitalik started the development of a new blockchain-based distributed computing platform, Ethereum, that featured a scripting functionality, called smart contracts.
Today blockchain technology is gaining a lot of mainstream attention and is already used in a variety of applications, not limited to cryptocurrencies.
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