While bitcoin is hailed as the leading cryptocurrency and a favorite choice, it wouldn’t have existed without blockchain technology. And without Scott Stornetta, even the blockchain wouldn’t have existed.
So, even as blockchain has become a hot topic these days and used as the base technology for tons of crypto, distributed ledger and smart contracts projects, the reality is that it was conceived as a solution to an even more fundamental problem: the existence and documentation of all data in an electronic state.
The blockchain foundations itself were laid by two scientists in the early 90’s. One of these is the legendary Scott Stornetta, a genius who along with his partner first conceived of the role that blockchain will play in the future as well as its many applications.
Of course, they didn’t think it would be this comprehensive, but they had an idea of the incredible potential such technology would hold.
Almost 30 years later, Scott Stornetta who is often referred to as the founding father of blockchain has seen his “baby” grow into a “toddler” and watching as it further develops and evolves into something that will most likely transform the world as we know it.
As bitcoin marks its 10th anniversary, let’s take a moment to reflect on how far the technology has come… from its conception to its present state, as well as see how Scott was able to come up with such a brilliant idea.
The Small Beginnings And The Birth Of The Idea
Stornetta who had his doctorate degree from Stanford was rounding up his research and thesis, when he started thinking of a world beyond the juvenile IT setup that was available at the time, where data didn’t need to be on paper… where they had to be in an electronic state.
Naturally, as with all true geniuses, he quickly foresaw the possible problems that could prevent the realization of that goal. According to him,
“If we can’t tell an old document from a new document, or a tampered one from an original, we’re going to be in real trouble as a society. And so, I realized there was going to be a need to create tamper-proof, immutable records in the digits themselves.”
This is what started the birth of blockchain. He then started seeking out possible solutions to this problem.
Sensing a partial answer in cryptography, he reached out to famed mathematician Stuart Haber and his group of brilliant cryptographers, working at the then Bell Communications Research. Stuart went on to become his partner in finding this solution and the creation of the blockchain.
The First Steps
Few months into the process of feverishly working on the project, they created a viable working solution. However, the solution had one major problem: it required the element of trust. And this was something Scott wanted out of the equation completely.
He wanted a blockchain that was trustless –which is a key property of the blockchain now- and didn’t rely on anyone, anything or organization.
Haber, being a hardcore scientist, felt it was best to explore every avenue by first determining why trust might be a key part of the solution. This was the beginning of an amazing historical feat that we all know as blockchain today.
They both quickly became aware of the fact that the best option would be to create a system where everyone on the network validated trust, thus making sure that everyone agreed.
“The only way to solve it would be to have a conspiracy that involved everyone in the world, and then I realized that was in fact the solution. That these widely distributed records, where everyone becomes a witness, essentially, solved the problem by turning it on its head.”
Thus, was the blockchain born –a prototype at least. Scott and Haber then co-authored what is now known as the foundational knowledge that powered bitcoin in an academic journal. The paper titled How to Time-Stamp a Digital Document, is now known as a corner piece of the blockchain industry.
Building on Scott’s paper, Satoshi who was completely taken and impressed by their approach to time-stamping, modified it to create what is now known as a consensus –essentially switching out the one man one vote method for Proof of Work consensus, otherwise called the one CPU, one vote system.
While this modification was quite innovative, Stornetta didn’t think it was the ultimate or perfect blockchain. His reason being that the abundance of mining pools earning huge amounts of block rewards, essentially defeated the purpose of the blockchain. As a result, he said,
“I don’t think we need to view what [Satoshi is] doing as the final word so much as the opening act. We can have so much of the benefit of the blockchain without today’s onerous consensus mechanisms as we currently see in play.”
In an effort to further ensure the realization of the ultimate consensus system, he put forward three questions to blockchain experts. These questions when answered correctly should create an incredible burst of innovation, where ultimately, cost is drastically lessened. These questions are as follows:
- Where should the computation be done?
- Who should have the governance?
- Who should be incentivized and for what?
Stornetta believes a crypto project like Steemit has done a far better job of getting close to the perfect system through its system of allowing users vote on the value provided by other network users.
Future Outlook On The Global Economy
Stornetta sees the current “chaotic” situation in cryptocurrency market as a good thing. He says he believes that as some of the current or new cryptos start growing in value, they would challenge the big financial institutions.
“[Cryptocurrencies are] like a do-it-yourself Federal Reserve kit; that’s now shipping to all sorts of developers around the world. Someone’s going to get it right.”
Of course, he didn’t mention any specific cryptocurrencies as his personal choice of the better cryptocurrencies. However, he has hailed the introduction of security tokens as the next logical step in the crypto space, and thinks it’s the next generation.
As for new blockchain projects, Stornetta has said blockchain projects with real solutions, creativity and “little humility” are those that will succeed in the future. He stated:
“The real issue is: how do I create value? Not: how do I get a billion people to do something. Because, if you can find a small or modest-sized problem where you can really bring value creation by decentralizing, then people are going to be interested.”
He also doesn’t approve of any current project resting on their oars because they have “arrived” or are considered the big success today. If anything, he counsels that,
“There’s a need to continue to innovate”, he suggested, giving the nod of approval to efforts such as Bitcoin’s Lightning network and the seemingly interminable development of Ethereum—both of which would extend their rule over the more spritely, lean competitors of tomorrow.”