BLOCKCHAIN

Today, these ideas have evolved into established and growing concepts, such as the
sharing economy.
Hal Varian’s concept, outlined in his paper entitled “Computer Mediated
Transactions” in 2010, 22 explains how the Internet and the World Wide Web, through
a long history of collective actions, have lead to a successively increased pace of combinatorial
innovation through collaborative efforts. The innovation of blockchain and
cryptocurrencies can be seen as a natural progression in the same ecosystem that led
to the development of the Internet.
2.2 How Blockchain Technology Developed
Since the late 1980s, an active movement called Cypherpunks – not to be confused
with Cyberpunk – has engaged activists advocating the use of cryptography and privacy-enhancing
technologies to defend personal privacy and the idea of an open society
in the digital world. 23 On October 31, 2008, a user named Satoshi Nakamoto posted
a paper for a decentralized money system named “Bitcoin: A Peer-to-Peer Electronic
Cash System” 24 to a Cypherpunk email forum at metzdowd.com. 25 The technical solution
proposed, blockchain, was a combination of previously known solutions, several
of which had been proposed earlier in the very same forum. The breakthrough was
figuring out how to use economic incentives to secure and bootstrap a decentralized
system of digital cash using the previously proposed solutions. For one of the pieces
of technology used – proof-of-work (explained more thoroughly in Chapter 2.3) –
Satoshi referred to Hashcash, 26 for instance, an idea proposed by Adam Back on the
Cypherpunk forum in May 1997. In the discussion following Adam Back’s proposal,
Wei Dai proposed an anonymous distributed electronic cash system in November
1998 named B-money, 27 which would make use of the proof-of-work system. Also in
1998, Nick Szabo proposed Bit Gold 28 as a reusable proof-of-work concept based on
a system very closely related to what we call a blockchain today. Szabo’s idea was
a distributed linked list of time-stamped strings, each connected by a proof-of-work
function, where the owner of each string of Bit Gold could be verified using cryptographic
signatures. In the Bitcoin proposal, Satoshi had moved the proof-of-work
and transaction verification system in the previously proposed systems into a concept
called mining, separated from the actual usage of the payment system, and carried
out by actors called miners. This makes the quorum of the blockchain based on the
processing capacity of miners instead of a quorum of addresses. Miners in that way
22. http://people.ischool.berkeley.edu/~hal/Papers/2010/cmt.pdf
23. http://www.wired.com/1993/02/crypto-rebels/
24. Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf
25. https://www.mail-archive.com/cryptography@metzdowd.com/msg09959.html
26. Back, A. (2002). Hashcash-a denial of service counter-measure.
27. http://www.weidai.com/bmoney.txt
28. http://unenumerated.blogspot.co.uk/2005/12/bit-gold.html
ENTREPRENÖRSKAPSFORUM 29