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History of Blockchain

The Technology Behind Blockchain

Since its introduction in 2008 by Satoshi Nakamoto (Nakamoto, 2008), blockchain has been receiving a lot of attention due to its application in cryptocurrency. The most popular example of blockchain technology is Bitcoin, a type of virtual currency that uses cryptographic proof instead of a third-party verifier (such as a banking system) to confirm transaction (Crosby, Pattanayak, Verma, & Kalyanaraman, 2016). Each user of Bitcoin is given a “public key” and a “private key.” When a transaction occurs, a digital signature created from the private key of the sender is sent to the public key of the receiver. This transaction is broadcasted to the entire network (Figure 1), and is verified by every node in the network (called “miner” node). The verification process includes confirming the sender’s identity by checking the digital signature, and making sure that the sender has sufficient fund by checking all of prior transactions involving the sender. To allow for all nodes to participate in the verification process, each miner node must go through a time-delay process that involves solving a mathematical puzzle before its work can be accepted. This is called “proof-of-work” since it takes computing power to solve the puzzles. The miner node is compensated for their work by a small amount of Bitcoin. The transaction is recognized when more than half (at least 51%) of the nodes agree that it is valid. This transaction is now recorded in a block, then added to the top of the ledger, linking to the last block in the ledger by adding to itself a hash made from the prior block. This is called the “blockchain.” All nodes in the network has a copy of the ledger, which will be updated simultaneously when transaction is confirmed. If a ledger differs from the majority, it will be updated to reflect the most up-to-date ledger. This is the blockchain concept of “distributed ledger.”

Application of blockchain in healthcare