Dr Ghassan Karame, Chief Security Researcher, NEC Laboratories Europe
The notion of blockchain can be traced back to the introduction of the Bitcoin system, which is a digital currency that has acquired considerable popularity since its launch in 2009. The design of Bitcoin offers the world the promise of a low-cost decentralized and anonymous currency and its core idea is simple: a system that allows two or more parties to exchange financial transactions without passing through intermediaries (such as banks or payment processors).
However, the rapid growth of Bitcoin was at first received with scepticism by both the financial sector and the research community. Financial markets were doubtful about its sustainability, given the absence of regulations and legislations. Researchers criticized its security and privacy provisions (see attached report).
In spite of this, Bitcoin experienced a huge uptake – more than any other digital currency proposed to date. This massive adoption of Bitcoin truly fueled innovation in the digital currency business, and there are currently more than 500 alternate systems, most of which are simply Bitcoin variants. Along the way, Bitcoin revealed the key-enabling technology within its system – a hidden gem with world-changing potential – the blockchain, that allows transactions, and any other data, to be securely stored and verified without the need of any centralized authority.
Meanwhile attitudes have changed. Today the research community is in search of a simple, scalable, and deployable blockchain technology. Likewise, the commercial world has seen a dramatic surge in interest in the use of blockchains across many applications, both financial and non-financial, and a significant investment in the development of blockchains by a wide variety of industries.