What is it for? Where did it come from?
Nakamoto mined the first bit-
coins in January 2009, and with that,
Bitcoin’s popularity began to grow
quickly in 2011, after a Gawker arti-
cle exposed Silk Road, a Bitcoin-
powered online drug marketplace.
Imitators called “altcoins” began to
emerge, often using Bitcoin’s open-
source code. Within two years, the
total value of bitcoins in circulation
had passed $1 billion.
Soon, technologists realized that
blockchains could be used to track
other things besides money. In 2013,
19-year-old Vitalik Buterin proposed
Ethereum, which would record not
only currency transactions but also
the status of computer programs called
smart contracts. Launched in 2015,
Ethereum—and now a host of competitors and imitators—promises to make
possible a new generation of applications that look and feel like today’s web
apps but are powered by decentralized
cryptocurrency networks instead of a
“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.” These are the words of Satoshi
Nakamoto, the mysterious creator of Bitcoin, in a message sent to a
cryptography-focused mailing list in October 2008. Included was a
link to a nine-page white paper describing a technology that some
are now convinced will disrupt the financial system.
It’s a new way of answering
an old question: how can we
create enough trust between
one another to peacefully
exchange something of value?
Early civilizations used
threat of force as retribution for dealing in
bad faith when engaging in trade.
The emergence of
banks provided orga-
nized, central authori-
ties to which we
could outsource trust—as long as we
THE NET WORK
across thousands of
computers can mecha-
nize trust, opening the
door to new ways of
organizing “decentralized” enterprises