Since nobody seems to know who Satoshi Nakamoto truly is, it is hard to find a clear statement from the brainchild of bitcoin about what were the events that led to the creation of the cryptocurrency.
What is clear though, is that he employed an ingenious mix of technologies to develop a system that would make it possible to create, store and transfer money electronically in a transparent and secure manner.
Working from 2007 to the final launch of the cryptographic program in November 2008, he did this through the disruptive discovery of the blockchain technology. With this technology, he discovered a way of ensuring that the system would have pre-set conditions that would make the bitcoin replicate the characteristics of normal currency, with other added and improved advantages like instant and cheap transfer of large amounts of money without the need of third parties like banks or mobile money transfer services.
#Definition
For a system to be called a blockchain, it must fulfill several conditions;
##There must be a community of willing members who are there because they have chosen to be and not because there is a requirement to join.
##There must be one or some agreed types of transactions that can happen between community members.
##There must be a ledger or a database in which certain types of transactions, agreed on by the community members, can be stored.
##There must be a method of verification and storage of transactions in a way that makes them immutable and permanent. The only way of changing the state of an asset is to initiate another transaction. This then makes it possible to have the historical provenance of the asset that is the basis of any transaction.
##There must be a way of electronically transferring value that is accepted by all members of the community. This is what is called a transaction.
Thus, it is clear that a blockchain is a network of individuals (using networked computers), who are guided by a clear and transparent cryptographic code which is accepted by all, to keep a regularly updated database of immutable, verified, and specific types of transactions.
All members of a blockchain are equal and have freely agreed to participate in the network. Inside it, they may do any of the following tasks;
##Engage in peer to peer transactions that are verified by the community and kept permanently in the ledger. In other words, there are no central trusted parties. The blockchain is the first truly decentralized human system.
##Confirm other member’s transactions. For a very small fee, the community agrees to verify and embed transactions into the ledger, or blockchain.
##Compare database information with others in the network and be able to flag suspicious copies and effectively reject them.
##Serve as witnesses between two peers and verify the fulfillment of conditions of that agreement, including the transfer of value. In other words, remove the need for expensive third parties.
##Set new rules through consensus etc.
Therefore, we can deduce that the innovation in blockchain technology is that it has managed to achieve decentralized consensus. This makes it suitable now for many applications.