Bitcoin and blockchain are deeply intertwined. The concept of digital currency necessitated the creation of blockchain technology, while blockchain, as the underlying foundation, made Bitcoin's payment ideals a reality. In short, blockchain was born because of Bitcoin, and Bitcoin is an application of blockchain.
Initially, the concept of digital currency was proposed by a group of technical geniuses who began exploring its practical implementation early on. For example, e-gold, the first digital currency, launched in 1996—two years before the now-world-renowned payment giant PayPal. Other early attempts like DigitalMonetaryTrust and Ven also emerged but ultimately failed.
Between 1990 and 2007, as geeks continued to experiment, many technologies advanced rapidly. For instance, in 1997, cryptographer Adam Back designed the HashCash method, laying the foundation for the Proof-of-Work (POW) consensus mechanism. In 1998, Szabo proposed the theory of smart contracts. Between 1999 and 2001, Napster, EDonkey2000, and BitTorrent emerged, establishing the basis for P2P network computing. The core technologies of blockchain were developed during this period.
It wasn’t until 2008, with the birth of Bitcoin, that cryptographic techniques became the mainstream foundation for digital currencies. Around this time, the concept of digital currency also gained widespread recognition. Bitcoin, in turn, had a profound impact on the current blockchain ecosystem because Satoshi Nakamoto, in the process of realizing Bitcoin, endowed blockchain with a critical property: decentralization.
Initially, Satoshi Nakamoto, Bitcoin’s creator, simply wanted to design a digital currency. However, when designing the underlying data architecture, he made a pivotal decision: to abandon the traditional centralized database model and instead create a strongly decentralized mechanism based on predecessors' work. This system allows anyone to participate with equal rights, free from interference by centralized teams or institutions. Once data is recorded, it cannot be altered. This characteristic enabled Bitcoin to achieve truly decentralized operation.
Over time, people realized the growing advantages of Bitcoin’s mechanism—it could run stably even if its creator disappeared. As a result, this underlying framework was extracted from Bitcoin and studied independently, giving rise to the concept of blockchain technology.
In summary, Bitcoin and blockchain share a chicken-and-egg relationship. Blockchain’s existence enables Bitcoin to function smoothly, while Bitcoin, as an application, unveiled the potential of blockchain, ushering in the Blockchain 1.0 era represented by digital currencies.
