The Fintech world is now taking blockchain for granted, but the seeds were sown before the Satoshi Bitcoin phenomenon, originating in a New Jersey restaurant in 1990
Amy Whittaker writing for the New York Times delved deep and came up with blockchain’s fascinating origins, and events which almost took place 20 years before the release of Nakamoto’s “Bitcoin: A Peer-to-Peer Electronic Cash System.”
Whittaker’s research takes the reader back three decades to a Friendly’s chain restaurant in Morristown, New Jersey. Physicist Scott Stornetta and his friend cryptographer Stuart Haber had been considering the possibility of working on a system that could transform personal files into an accurate historical and tamperproof record.
The encryption technology which has made blockchain and cryptocurrencies possible has, and will, revolutionize the way money is perceived and used, taking financial systems into uncharted territory in the near future. At the restaurant Stornetta on that day made the connection, realizing that a workable, tamper-proof system would need to share multiple copies rather than be stored with a central recorder, thereby making alteration and interference virtually impossible.
From there the concept of a decentralized record or ledger-a blockchain-was born. The pair had been working at Bellcore at this time but decided to delve into Stornetta’s idea of a decentralized ledger filing system
In 1991 they published their paper “How to Time-Stamp a Digital Document” which basically outlined much of the theories of blockchain which are now well established. The pair published more papers on blockchain and were also named co-inventors of the Bellcore patent, before then moving on to setting up Surety, which linked any piece of information, a contract, into a block of transactions; thus a complete blockchain picture was created.
Despite both cryptographers staying on a few years, four years before Bitcoin arrived on the scene in 2004 the Surety patent lapsed after non-payment of maintenance fees. Haber seems nonplussed at the dizzy heights their ideas finally reached further down the track:
“It was an interesting little paper that turned into a company—which I didn’t expect—and then I went back to being a research scientist.”
Stornetta says that Surety’s connection to Bitcoin is “pretty cool” and that he could have happily contributed any forthcoming royalties to blockchain development had they continued with their work. Stornetta eventually went back to teaching maths at High School.
When “Bitcoin: A Peer-to-Peer Electronic Cash System.” was released in 2008 outlining the concept of peer to peer payments system which would bypass financial institutions, eight citations of previous works were included; three of those were papers by Haber and Stornetta.