The story of blockchain began on 31 October 2008 when an article “Bitcoin: A Peer-to-Peer Electronic Cash System” [1] was published in a cryptography mailing list by Satoshi Nakamoto. The author described it as «A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution». Soon he published the source code of a computer program that implemented the ideas from the article and provided a solution to the double-spending problem by using cryptography proof-of-work math algorithm. Satoshi Nakamoto still remains an online profile with a currently unconfirmed physical identity. But programmers and developers around the world immediately recognised the intelligence behind Nakamoto's peer-to-peer design, and worked with it together to further develop Bitcoin.

Bitcoin, much like the internet in 1994, is not easily explained or understood. While the internet changed the way people communicate, Bitcoin changes the way people view and use money.

It was created to provide an alternative to the banking system. It is an open accounting system that allows thousands of computers from around the world to track ownership of digital tokens - the Bitcoin - as part of a purchase transaction. The main advantage of the system is that it does not depend on any trusted authorities like banks and uses peer-to-peer communications. If someone wants to create a fake transaction or send the same tokens (money) to many addresses, the distributed computer network will reject invalid transactions. This works unless someone controls more than 50% of total computing power that is almost impossible. No one - neither persons, companies nor governments - can afford this. Thus Bitcoin is free from any centralised control, censorship, and sanctions and so on.

In October 2009, a first exchange rate was published, listing the value of 1,309 Bitcoins at $1. Bitcoins were cheap and throughout the following year they continued to trade for fractions of a cent. The first known transaction with Bitcoin occurred in 2010 when a Florida resident offered 10,000 Bitcoins to anyone who would order him a pizza [2]. One user in London agreed, making a long-distance phone call to a Papa John's and cementing the first Bitcoin transaction in history. Today the exchange rate of 1 Bitcoin is above $1000 with historical maximum around $1365 on March 10 2017 on Poloniex exchange. So 2 pizzas for 10,1000 Bitcoins would cost today more than 10 million dollars.

Blockchain as the core of technology

The core of Bitcoin is a blockchain. It is a public ledger that records Bitcoin transactions. Few transactions are combined into a block to be chained to the end of blockchain using cryptography hashes calculated by network nodes, or miners. New coins are generated as a reward to miners for new found blocks, but coin emission rate and total amount are limited by the algorithm to prevent inflation. The blockchain is a distributed database - to achieve independent verification of the chain of ownership of any and every Bitcoin (amount) each network node stores its own copy of the blockchain. Virtually there is no way to change any block in the chain not affecting the following blocks. This immutability makes the blockchain technology to be an ideal solution to record things that should never be changed. It does not only apply to digital cash, but to any data.

Altcoins as Bitcoin alternatives

The next step in the blockchain evolution was made with creation of altcoins. Altcoins are cryptocurrencies other than Bitcoin [3]. The majority of altcoins are forks of Bitcoin with small uninteresting changes, but there are exceptions which add a new value to altcoins. The ways altcoins have modified Bitcoin are [4]:

– Use different proof-of-work algorithm. The mining should be hard in order to secure the network. If some group or company develops a specialised hardware device to mine, it can monopolise the market and control the network. So another algorithms were developed to make this task harder.

- Use proof-of-stake instead of proof-of-work. Instead of sacrificing energy to mine a block, a user must prove he owns a certain amount of the cryptocurrency to generate a block. This saves the energy but has other concerns.

- Provide a way to build distributed applications on top of the cryptocurrency. This is the most promising direction in the blockchain evolution or rather revolution.

Smart contracts and distributed applications

Original Bitcoin has a little to do with it apart from being a digital currency. But some coins provide a way to use the mining network as a supercomputer capable to perform instructions using some computer language. Most known example of such currency is Ethereum. As stated on its home site «Ethereum is a decentralised platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middle man or counter party risk» [5].

Traditional physical contracts, such as those created by legal professionals today, contain legal language on vast amounts of printed documents and heavily rely on third parties for enforcement. This type of enforcement is not only very time consuming, but also very ambiguous. If things go astray, contract parties often must rely on the public judicial system to remedy the situation, which can be very costly and time consuming.

Smart contracts are entirely digital and written using programming code languages. This code defines the rules and consequences in the same way that a traditional legal document would, stating the obligations, benefits and penalties which may be due to either party in various different circumstances. This code can then be automatically executed by a distributed ledger system.

A lot of groups or companies started to research the blockchain technology and adapt it to own needs as well as create development systems for it. For instance, Microsoft Corporation included support for Solidity, the smart contract language of Ethereum, into its VisualStudio development environment and established the Ethereum Consortium Blockchain Network to develop Ethereum-based applications [6].

There are countless practical use cases where blockchain technology is being applied to achieve significant benefits. One notable example is a DAO. A decentralised autonomous organisation is an organisation that is run through rules encoded as computer programs called smart contracts. A DAO's financial transaction record and program rules are maintained on a blockchain. There are several examples of this business model. The best-known example was The DAO [7], a DAO for venture capital funding, which was launched with $150 million in crowdfunding in June 2016. The DAO had an objective to provide a new decentralised business model for organising both commercial and non-profit enterprises.It was instantiated on the Ethereum blockchain, and had no conventional management structure or board of directors.The DAO was stateless, and not tied to any particular nation state. As a result, many questions of how government regulators would deal with a stateless fund were yet to be dealt with.

Another example is a music industry. Either the musicians themselves or a record label own the rights to the music put out. As such, those rights entitle them to receive residual payments every time the music is used for commercial purposes. The issue with this system knows who owns these music rights and ensuring that payments are being distributed to the proper parties. In this case, a public blockchain could keep track of ownership rights. These rights could be publicly accessible to all, and because public blockchains are append-only (i.e. add only) databases, we know that this information has not been altered.

The Russian financial company ReGa Risk Sharing has developed a platform for mutual insurance of pets using smart contract technology, photo identification and scoring [8]. In order to become a member of the club it is necessary to pay monthly membership fees, the amount of which varies depending on the provision of services from 100 to 900 rubles. This gives participants the opportunity to recover up to 80% of their costs. According to the company's representatives, after visiting the veterinarian, the service analyses the user's check, compares it with the information of the vet clinic, and returns part of the funds from the general fund. All this is done automatically without human assistance.

Other examples include government-backed national blockchains developed by banks to enforce credit agreements, welfare distribution and secure voting systems recording election data into blockchains, game credits, distributed file systems, and many more. The possibilities are limitless.

Blockchain is, essentially, the most secure way we can make exchanges today, allowing to send an asset without using a trusted emissary, creating a global common exchange digital marketplace. Blockchain technology has the potential to make the world a more efficient, frictionless place. The amount of people around the world living in either broken systems or entirely corrupt systems is staggering. If done right, blockchain could positively reform entire systems.

It’s such early days for blockchain - most early investors in the original internet tell where are in the equivalent of 1991-92 – at the most. But this technology is moving much more quickly toward global adoption. In a few short years we will be living in a world where it is being used but no one thinks about it – they just like the ease of use, the low cost and the security.

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ARCGIS BLOG. Vector Tiles preview. Retrieved March 3, 2017 from https://blogs.esri.com/esri/arcgis/2015/07/20/vector-tiles-preview/