How people who don't trust each other
keep one ledger

Until then, both sides of an encrypted conversation had to share the same secret key in advance. Diffie and Hellman proposed splitting it in two: a public key anyone can see and a private key only you hold. A message signed with the private key can be checked by anyone with the public key, but can't be forged without the private one. On a blockchain, "my money" ultimately means holding the private key that can sign it away.

• Public-key cryptography ↗

Rivest, Shamir and Adleman built a working public-key system and digital signature on the fact that large numbers are hard to factor. It went on to become the backbone of internet security.

Ralph Merkle devised a structure that hashes data in pairs, then hashes those results in pairs, climbing like a tree until everything is summed up in one root hash. Change any piece of data and the root changes, and proving that one item is included takes only log₂n hashes. It's how a block summarizes thousands of transactions.

• Merkle tree ↗

David Chaum invented the blind signature, which lets a bank sign something without seeing its contents. The bank's backing can be proven, but not even the bank can trace who spent the money or where. Anonymous digital cash became possible.

Several generals surround a city and can only communicate by messenger, and some of them are traitors sending false messages. How can the loyal ones agree on the same plan? Lamport and his colleagues used this picture for computers that must agree even when some fail or are hacked, and proved that tolerating f traitors among n generals requires n ≥ 3f + 1, so fewer than a third can be traitors.

• Byzantine fault ↗

Koblitz and Miller independently proposed public-key cryptography built on the mathematics of elliptic curves. It matches RSA's security with much shorter keys. Bitcoin signs transactions this way, on a curve called secp256k1.

Fischer, Lynch and Paterson proved that on a network where messages can be delayed indefinitely, no algorithm can guarantee agreement if even one computer might stop. Every practical solution since has dodged this wall by adding an assumption.

Goldwasser, Micali and Rackoff showed that it is mathematically possible to convince someone you know a fact without revealing anything about the fact itself. It was pure theory then. Thirty years later it became a key to blockchain privacy and scaling.

• Zero-knowledge proof ↗

Chaum founded DigiCash to turn blind signatures into a product. The same year Lamport wrote Paxos, an algorithm that keeps the remaining computers in agreement when some stop (it was published in 1998). Data centers at Google and Amazon still run on algorithms like it.

• DigiCash ↗

Haber and Stornetta described how to link documents' hashes in time order, each one including the hash before it. Changing any record in the middle means changing every record after it. This is the "chain" in blockchain, and three of the eight references in the bitcoin white paper are their papers.

• Linked timestamping ↗

When Phil Zimmermann released PGP, strong encryption anyone could use, the US government, which classified strong cryptography as a munition and restricted its export, opened an investigation into him. The standoff between the government and cryptographers became known as the Crypto Wars.

Eric Hughes, Timothy May and John Gilmore started the Cypherpunks mailing list. In "A Cypherpunk's Manifesto" the next year, Hughes wrote that we cannot expect governments or corporations to grant us privacy; we must write the code ourselves. Nearly all of blockchain's pioneers were on that list.

• Cypherpunk ↗

To fight spam, Dwork and Naor proposed that every email require the sender's computer to solve a puzzle that is hard to solve but easy to verify. A second per message means nothing to an ordinary user, but a great deal to someone sending millions.

Nick Szabo, a legal scholar and computer scientist, proposed contracts that carry themselves out once their conditions are met. His example was the vending machine: put in money and the goods come out, with no one in between.

• Smart contract ↗

Haber and Stornetta's company began printing the latest hash of its chain in the classified ads of The New York Times every week. No one can alter every printed copy of a newspaper. That's why it is sometimes called the world's oldest blockchain.

E-gold, a digital currency backed by gold, launched and grew to millions of users. But it was a centralized currency run by a company, and that would later prove to be its weakness.

British cryptographer Adam Back created Hashcash, which makes a computer search for an input whose hash begins with a certain number of zeros. The only way is brute force, which costs computation and electricity, while checking takes a single hash. This is exactly how bitcoin mining works.

• Hashcash ↗

Wei Dai proposed b-money, an anonymous distributed currency created through computational work, with every participant keeping their own copy of the ledger. Around the same time Nick Szabo sketched bit gold, which treats the output of proof of work itself as something scarce like gold (he published it in 2005). Neither was ever built.

The technology was excellent, but negotiations with banks kept falling apart, and DigiCash went bankrupt. The lesson: however well designed digital cash is, it disappears along with the company that runs it.

Castro and Liskov published PBFT, a consensus algorithm that tolerates Byzantine faults and still runs fast in practice. But it assumed a closed system where every participant is known in advance.

SHA-256, a hash function designed by the US National Security Agency, was published as a standard. Change one character of the input and the output changes completely, and the input can't be worked out from the output. Bitcoin uses it both to link blocks and to mine them.

John Douceur at Microsoft described an attack in which one person on an open network creates thousands of fake identities to take over a vote, naming it the Sybil attack after a book about multiple personalities. He also showed that it is hard to stop without a central authority. That is why voting-based consensus couldn't work on the open internet.

• Sybil attack ↗

Hal Finney built RPOW, which let proof-of-work tokens be passed on and spent again. But stopping the same token from being spent twice still required one trusted server.

The US government indicted e-gold's operators for money laundering, and e-gold effectively shut down in 2009. Together with DigiCash's bankruptcy, it showed that digital money with a central operator either fails or gets shut down.

On October 31, six weeks after Lehman Brothers collapsed, someone using the name Satoshi Nakamoto posted a nine-page paper to a cryptography mailing list. Transactions are chains of signatures; blocks of transactions are chained together by including the previous block's hash and a Merkle root; adding a block requires solving a Hashcash-style proof of work. Almost none of the parts were new. It was the first design to put thirty years of parts together.

• Bitcoin ↗

Satoshi replaced the question "who gets to vote?" with "who spent energy on computation?" Fake identities are free, but computing power needs real hardware and electricity, so the Sybil attack is solved. Participants accept the chain with the most accumulated work as the true one, and the design makes honest mining more profitable than rewriting the chain, even for an attacker.

Section 11 of the white paper calculates the chance that an attacker z blocks behind will ever catch up. It is the classic gambler's ruin problem from probability, and the chance shrinks exponentially as z grows. The number of blocks an attacker can build in secret is modeled with a Poisson distribution. An attacker with 10% of the network's computing power has less than a 0.1% chance of reversing a transaction six blocks deep.

On January 3 Satoshi created the first block and embedded that day's front-page headline from The Times of London. It proves the block was made no earlier than that day, and reads as a protest against bank bailouts. The block reward started at 50 coins and halves every 210,000 blocks (about four years), so by a geometric series the total supply converges to 21 million.

• Genesis block ↗

On January 12 Satoshi sent 10 bitcoins to Hal Finney, the creator of RPOW, in the first transfer. In October a website set the first exchange rate based on the electricity cost of mining: about 1,300 bitcoins to the dollar.

On May 22 programmer Laszlo Hanyecz bought two pizzas for 10,000 bitcoins. Known as the first purchase of real goods with bitcoin, it is still celebrated as Bitcoin Pizza Day.

In August an integer overflow bug let someone create 184 billion bitcoins. Within hours a fixed version of the software was released and the offending block was dropped from the chain. It was the first sign that even a ledger no one can alter can be changed if people agree on which code to run.

Silk Road, a dark-web drug marketplace that accepted only bitcoin, opened. Its operator Ross Ulbricht was arrested in 2013 and sentenced to life, then pardoned in 2025. But because every transaction on a blockchain is public forever, it is actually easier to trace than cash, and many criminals were later caught through blockchain analysis.

• Silk Road (marketplace) ↗

In April Satoshi emailed the developers and disappeared. The roughly one million bitcoins believed to have been mined early on have never moved. Having no leader to arrest or pressure turned out, paradoxically, to be one of bitcoin's strengths.

Namecoin, which tried to build a decentralized domain name system, became bitcoin's first fork, and Litecoin, with a different hash function, followed. Ripple, aimed at bank transfers, came the next year, and Dogecoin, a joke based on a Shiba Inu meme, in 2013.

Peercoin, created by Sunny King and Scott Nadal, introduced proof of stake: the right to make blocks is handed out not only by computing power but by how many coins you hold and for how long. The idea that Sybil attacks could be stopped without burning electricity led, ten years later, to Ethereum's switch.

• Peercoin ↗

Mining had moved from CPUs to graphics cards, and then chips designed solely to compute bitcoin hashes (ASICs) turned it into a heavy industry. Mining operations clustered in China, where electricity was cheap.

Mastercoin, a project to issue new tokens on top of bitcoin, raised money from investors. It is considered the first ICO (initial coin offering).

Nineteen-year-old Vitalik Buterin reasoned that if bitcoin was a calculator running a single app, payments, then a blockchain could be a general-purpose computer that runs any program. It would be the platform for the smart contracts Szabo had imagined in 1994.

• Ethereum ↗

Mt. Gox, originally built as an exchange for trading-card-game cards, had grown to handle over 70% of the world's bitcoin trading. After hacks and mismanagement it lost about 850,000 bitcoins and went bankrupt. It was the first lesson that a centralized exchange built on a decentralized network is just as risky as an old-fashioned bank.

• Mt. Gox ↗

The Ethereum team presold ether and raised about $18 million worth of bitcoin. It became the template for blockchain projects funding development by selling tokens.

Tether launched as a stablecoin pegged one coin to one dollar, backed by matching reserves. Exchanges adopted it in place of dollars as the base currency between volatile coins, and it became the most traded coin of all. Whether its reserves were really sufficient was disputed for years, and in 2021 it paid a settlement to the New York attorney general.

• Tether (cryptocurrency) ↗

Ethereum launched on July 30. Thousands of nodes run the same programs identically and agree on the results (the EVM). Its language is Turing-complete, so an infinite loop could freeze the network, and the halting problem means you can't detect one in advance. Ethereum solved this with economics: every operation costs a fee called "gas," and execution stops when the gas runs out.

The ERC-20 standard was proposed, letting anyone issue their own token in a few dozen lines of code. The same year, permissioned enterprise blockchain projects such as the Linux Foundation's Hyperledger began. Most of them ended with the lesson that when everyone already trusts an administrator, an ordinary database is faster and cheaper.

The DAO, an investment fund built entirely as a smart contract on Ethereum, raised about 14% of all ether at the time. In June a reentrancy bug, where the withdrawal function called out before updating the balance, let someone drain about 3.6 million ether. In July the majority rewrote history with a hard fork to return the money, and those who refused and kept the original chain became Ethereum Classic.

• The DAO ↗

The privacy coin Zcash used zero-knowledge proofs (zk-SNARKs) to hide the sender, receiver and amount while still proving a transaction is valid. The pure theory of 1985 was put to real use for the first time.

The block size limit capped bitcoin at about seven transactions per second. One side wanted bigger blocks; the other wanted to keep the base chain small and secure and build a separate layer on top. They fought for more than two years. In August the latter's upgrade, SegWit, activated, and the opposing side split off into Bitcoin Cash with larger blocks.

• Bitcoin scalability problem ↗

Once anyone could issue a token and raise money worldwide, ICO fever took hold. EOS raised about $4 billion over a year, but many projects had nothing behind them or were outright scams. In July the US Securities and Exchange Commission (SEC) said tokens like The DAO's could be securities, and in September China banned ICOs entirely.

• Initial coin offering ↗

When CryptoKitties, a game for buying, selling and breeding cartoon cats on the blockchain, took off, all of Ethereum slowed down and fees spiked. The scaling problem was on display for everyone. The same month MakerDAO began issuing Dai, a dollar-pegged stablecoin where a smart contract, not a bank, holds ether as collateral.

In December bitcoin climbed close to $20,000, then fell more than 80% the next year as the "crypto winter" set in. The same month an American iced tea company renamed itself Long Blockchain, and its stock nearly tripled in a day.

ERC-721, the standard for tokens that are each unique (NFTs), was finalized. A digital file can be copied endlessly, but the record of who owns the original can exist only once. The same year the Lightning Network launched to handle instant small payments on top of bitcoin.

Uniswap sets prices with no one matching orders: two tokens sit in a pool, and the price follows the formula x × y = k. Take one token out and its price rises automatically as its supply in the pool shrinks. This automated market maker (AMM) replaced the centuries-old order book of the stock exchange with a single equation.

• Uniswap ↗

Researchers at Cornell analyzed how those who build blocks can exploit their power to order transactions, jumping in just ahead of other people's trades to skim profit. This became known as miner extractable value (MEV). Wall Street's speed race was being replayed on the blockchain.

When Facebook announced Libra, a stablecoin for its billions of users, governments and central banks pushed back hard. The project was shut down in 2022, but it pushed countries to hurry on digital currencies and stablecoin regulation.

• Diem (digital currency) ↗

When the lending platform Compound began handing out its own token as a reward, "yield farming," hopping between platforms to maximize rewards, exploded. Interlocking DeFi programs also made the flash loan possible: borrow a fortune with no collateral, as long as you repay it within the same transaction. Attackers used flash loans to summon huge sums for an instant and manipulate prices.

• Decentralized finance ↗

MicroStrategy began converting its corporate cash into bitcoin. By 2025 a wave of public companies would follow, buying bitcoin in bulk.

In March an NFT of a work by digital artist Beeple sold at Christie's for $69.3 million. Ape-picture NFTs became a celebrity fad, and in November ConstitutionDAO, which crowdfunded nearly $47 million online to buy a first printing of the US Constitution, lost the auction.

• Non-fungible token ↗

Tesla bought bitcoin, Coinbase, the largest US exchange, listed on Nasdaq, and El Salvador made bitcoin legal tender. When China banned mining and trading outright, miners moved to the United States, Kazakhstan and elsewhere. In November bitcoin set a then-record of about $69,000, and criticism of mining's energy use grew louder.

As Ethereum fees soared, faster and cheaper rivals such as Solana, Avalanche and BNB Chain grew. Bridges for moving assets between chains appeared too, acting as giant vaults with weak security, and became the biggest targets for attackers.

In August Ethereum adopted EIP-1559, which burns the base portion of each transaction fee instead of paying it to miners, so the busier the network, the more the supply of ether shrinks. In November bitcoin activated Taproot, its biggest upgrade since SegWit, introducing Schnorr signatures that can combine many signatures into one and letting complex spending conditions be expressed more cheaply and privately.

The bridge for the game Axie Infinity was hacked for about $620 million. The US government named North Korea's Lazarus Group as the culprit.

Terra's stablecoin UST held its dollar value with no real collateral, through swaps with its sister coin Luna. That only works as long as people believe in Luna's value. In May mass withdrawals shook UST, Luna was minted in huge amounts and crashed, which further destroyed trust in UST, and more than $40 billion vanished in days. Three Arrows Capital, Celsius and Voyager went bankrupt in the fallout.

• Terra (blockchain) ↗

In August the US Treasury placed Tornado Cash, a smart contract that mixes Ethereum transactions to obscure their source, on its sanctions list, citing its use by North Korean hackers to launder funds. In 2024 a US appeals court ruled that immutable smart contracts no one can own or change are not sanctionable property, and the sanctions were lifted in 2025. Its developers faced separate criminal trials.

• Tornado Cash ↗

On September 15 Ethereum switched from proof of work to proof of stake. Instead of a computing race, participants who lock up ether as collateral propose and validate blocks, and lose their collateral if they cheat. The cost of stopping a Sybil attack shifted from electricity to money, and energy use fell by more than 99.9%.

• Proof of stake ↗

FTX, one of the world's three largest exchanges, collapsed when it emerged that customer deposits had been funneled to its founder's trading firm, Alameda Research. Founder Sam Bankman-Fried was sentenced to 25 years in 2024. Most of 2022's collapses happened not in the blockchains themselves but in the centralized companies built on them; the bitcoin and Ethereum networks never stopped.

• Bankruptcy of FTX ↗

The Australian Securities Exchange scrapped the blockchain-based settlement system it had been pursuing since 2017 and wrote off about A$250 million. TradeLens, the shipping blockchain from Maersk and IBM, also shut down. Without participants who distrust one another, blockchain's expensive consensus isn't worth it.

Casey Rodarmor released Ordinals, which uses the space opened up by SegWit and Taproot to inscribe images or text onto individual satoshis. NFTs and token issuance boomed on bitcoin, fees soared, and the old argument over whether bitcoin should only be money flared up again.

In July a US court ruled in the Ripple case that tokens sold to institutional investors were securities, but tokens sold to the public on exchanges were not. In November Binance, the world's largest exchange, agreed to pay $4.3 billion for anti-money-laundering violations, and its founder Changpeng Zhao served four months in prison.

In January the US SEC approved spot bitcoin ETFs, and institutional money poured in. Spot ether ETFs began trading in July. April brought the fourth halving, and at year's end the European Union's Markets in Crypto-Assets regulation (MiCA) took full effect.

Rather than making its main chain faster, Ethereum chose rollups, which process transactions outside (on layer 2) and record only the results. Optimistic rollups assume results are correct and allow challenges; ZK rollups prove correctness with zero-knowledge proofs. A March upgrade gave layer 2s a cheap place to store data (blobs), and their fees fell sharply.

The High Court in England ruled that Craig Wright, an Australian computer scientist who had long claimed to be Satoshi Nakamoto, was not Satoshi and did not write the white paper. Satoshi's identity remains unknown.

After the new administration took office, the SEC dropped many of its lawsuits against crypto companies, and a March executive order created the Strategic Bitcoin Reserve. In July the GENIUS Act, a stablecoin law, was signed, and the House passed the CLARITY Act, which sets the structure of crypto markets, 294 to 134.

• GENIUS Act ↗

In February about $1.5 billion in ether was stolen from the exchange Bybit. North Korea was again named as responsible.

In October bitcoin hit an all-time high of about $126,000. Days later, on October 10, about $19 billion in leveraged positions were forcibly liquidated in a single day, the largest liquidation in history.

Bitcoin fell more than half from its October 2025 high, to around $60,000 in June, before partly recovering. That is milder than past post-peak drops, which each exceeded 75%, but it swung with interest rates and inflation and moved much like other risk assets.

After passing the House, the CLARITY Act cleared the Senate Banking Committee in May, but on September 15 a procedural vote to open floor debate failed 49 to 50, with 60 votes needed. The bill can be tried again, but the rules for US crypto markets are uncertain once more.

With future quantum computers expected to break elliptic-curve cryptography using Shor's algorithm, discussion is growing about moving blockchains to quantum-resistant signatures. A ledger built on fifty-year-old mathematics is reconsidering its foundations in the face of the next generation of math and physics.