The launch of Bitcoin in 2009 revolutionized the way society perceives financial systems, especially in the wake of the Great Recession (2007–2008). As traditional financial institutions like centralized banks and hedge funds crumbled under the weight of speculative investments in opaque financial instruments, blockchain technology emerged as a beacon of transparency and decentralization.
Bitcoin introduced a groundbreaking system where transactions were securely validated through the Proof of Work (PoW) consensus mechanism, mitigating risks such as double spending and establishing trust without intermediaries. In 2013, Ethereum expanded the blockchain landscape with its visionary white paper, introducing a platform that allowed developers to create decentralized applications (DApps) powered by smart contracts and the Turing-complete
Ethereum Virtual Machine (EVM). This innovation opened up a world of possibilities, enabling blockchain to extend beyond digital currency. However, by 2017, the rapid growth of Bitcoin and Ethereum exposed critical limitations. Scalability issues such as low transaction throughput and soaring fees made these systems less practical for widespread use, highlighting the need for more efficient solutions.
