In 2008, a global financial crisis erupted. On October 31, "Satoshi Nakamoto" published a paper titled A Peer-to-Peer Electronic Cash System, which described the working model of Bitcoin.
On January 3, 2009, Satoshi Nakamoto mined the first batch of Bitcoin on a small server in Helsinki, Finland, marking the birth of Bitcoin.
On May 22, 2010, a programmer spent 10,000 Bitcoin to buy two pizzas, giving Bitcoin its first monetary value.
Bitcoin, as the first application of blockchain, is widely known. However, blockchain as the underlying technology is less understood. Why is it called blockchain?
To understand this, we need to look at the data structure of blockchain. The reason it’s called blockchain is that it consists of data blocks and a "chain." The data blocks formed by uploaded data are linked together in chronological order, creating a chain-like structure.
Simply put, we all know that the internet is a vast network database, and blockchain is essentially an immutable database. During data upload, the data is packaged together to form data blocks. This is somewhat like a factory packing fruits into glass jars to produce canned food. These packaged data blocks are technically called "blocks."
A block is the basic storage unit of this database, recording all transaction information between nodes maintaining the network within a certain period. Each time transactions are recorded, a series of them are packaged into a block. For example, when Bitcoin was first created on January 3, 2009, Satoshi Nakamoto established the first block, also called the "genesis block," on a small server in Helsinki, Finland, before mining the first batch of Bitcoin.
Since it is a database, the data inside needs to be verified and protected. Thus, the blockchain database links each block in chronological order through cryptographic methods, making the entire database more secure and trustworthy.
The specific cryptographic method used here is the hash algorithm, also known as the hash function, which can compute something called a hash value. Each block includes the hash value of the previous block at its beginning, thereby establishing the linkage.
The characteristic of this function is that if the input data changes—even by a single character—the entire hash value will become completely different. This means that if someone tries to maliciously alter data in a previous block, the subsequent hash values will change, making it detectable by others and ensuring the database’s security.
When all blocks are linked together one by one through the hash algorithm, like an iron chain, a chain-like data structure is formed. Due to this chain structure, the original Bitcoin whitepaper in English vividly called it a "chain of blocks." Later, in the earliest Chinese translation of the Bitcoin whitepaper, it was translated as "區塊鏈" (blockchain), and over time, this became the standard term, i.e., "blockchain."
As a new technology, blockchain may have a unique name, but its prospects are vast. Its special chain structure ensures that the technology has the characteristics of immutability and traceability. These features are highly favored by financial institutions. For example, when banks handle fund settlements or data entry, blockchain’s immutability and traceability ensure that records cannot be tampered with and that the flow of every transaction can be traced, making financial transactions more secure and trustworthy.
Thus, blockchain and finance are inherently complementary: finance provides application scenarios for blockchain, while blockchain provides a secure foundation for finance. Additionally, in today’s internet era, there are many information security issues, leading to rising trust costs between users and businesses. Blockchain’s features offer technical support to solve these trust problems.
If the internet led the revolution in information transmission, then perhaps one day, blockchain will lead a revolution in data trust, just like the internet. Let’s look forward to it together!
