Now that we’ve got how blockchains work nailed down, let us look at some different blockchain technology applications.
The most famous application, and what the technology was initially invented for, is a new form of money free of central control, which we now know as cryptocurrency, the first and most famous example being Bitcoin.
By storing all Bitcoin transaction data on a blockchain, Satoshi Nakamoto created the world’s first digital and decentralised version of sound money. We covered this extensively in a previous article so check that out if you would like a refresher.
Since then, blockchain’s have been applied to many other areas outside of currency. Another famous example is Ethereum.
In 2013, programmer, Vitalik Buterin, proposed that blockchain technology could be used to create what he termed smart contracts in a white paper.
In 2015, the Ethereum blockchain was launched to build these contracts on top of, complete with a programming language (Solidity) and native currency (Ether).
A good way to think about it is that Bitcoin gave us programmable and decentralised money, and Ethereum gives us programmable and decentralised contracts.
From this, many applications have been built, and new industries are being born. Currently, the most notable of these is decentralised finance or DeFi, an experimental form of finance where smart contracts (and therefore blockchains) are used as intermediaries instead of brokerages, exchanges or banks. For more details on Ethereum, see Article 7 – Ethereum – the World Computer.
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