Updated: Apr 4
Yesterday, at the European Union Projects' kick-off conference, I talked formally about connecting blockchain to biogas and doing emissions trading. I learned about blockchain and read that distributed ledgers have actually existed for a long time -- 500AD.
The single entry ledger as a mechanism to ensure the legitimacy of transactions was found in India around 3000 BC. These single-entry ledgers were used by kings to keep track of all their transactions. In the case of a cross-country transaction, it would be impossible for only one party to verify the transaction, and a double-entry ledger would be created. This was the origin of accounting in Italy in about 1340 AD. With this double-entry, it is necessary to describe the story of the ownership of the property. The double-entry ledger, which you may have heard of, was followed by cryptography and led to Bitcoin emergence in 2008. This system, called the blockchain, is a triple-entry ledger. In this triple-entry ledger, everyone has a decentralised, encrypted ledger, rather than just one or two authorised people or organisations.
However, around 500 AD, there was actually a system where not just one or two people but everyone had a decentralised ledger. On the Yap island, the assets were giant coin-like stones with holes in them, just like you see them in the cartoons. The stone was not suitable for carrying, so the tribe had to remember the stone owner as knowledge. Furthermore, it was possible to own only one part of this huge stone asset, and whenever the owner changed through a transaction, the registration of the owner was stored in a decentralised manner.
In particular, each time the owner changed, the tribesmen were gathered and told of the change of ownership. This decentralised knowledge of ownership meant that the records would not be lost if someone tampered with them or if one person died. This may seem like a precarious mechanism, relying on people's memories, but it is a sound way to share knowledge with many people so that their records do not disappear. The blockchain system also prevents the records from being tampered with or lost by storing them in a decentralised way. This is why blockchain is a trustworthy system.