Yeast is basically a fungus having a single cell. Yeasts are closely related to various other fungi, many of which are familiar to us and even sold in supermarkets, such as edible mushrooms, common baker's yeast used for leavening bread, molds used for ripening blue cheese as well as molds that turn out antibiotics for medical as well as veterinary use.
The word "yeast" has its origin in the Old English term "gist", which denotes foam or bubble. So far, scientists have been able to identify hundreds of yeast species. One among them, called Saccharomyces cerivisiae, have been used for several thousand years for baking and brewing purposes.
Archaeologists have unearthed proof regarding bakeries and breweries in ancient Egypt that used yeast as long as 4,000 years ago. Despite this, people were uncertain until the 19th century as to how these organisms functioned or what they actually were. During medieval England, it was believed that the foam on beer possessed magical properties and, hence, called it "godisgoode", which denotes "God is good".
Renowned French chemist and microbiologist Louis Pasteur published a paper in 1857 that proved yeasts are living organisms and the foaming as well as rising caused by them is basically a fermentation process. Like humans and other animals, yeasts also take in oxygen and blow out carbon dioxide (CO2). When yeast is blended with gluten, which is actually the protein created as a result of mixing wheat with water, the fungus gives out carbon dioxide, resulting in formation of bubbles in the dough, thereby giving bread the due texture. Similar to other organisms that inhale and exhale, they digest sugar. The waste produced during this process is actually the yeast-like flavour we get from bread.
Provided yeasts get ample amounts of food and air and the temperature is favourable for them, they will proliferate at a very rapid pace. When this happens inside the dough, the bread rises since the single-cell yeasts are now substituted by large clusters. When you punch bread dough and work on it after it rises for the first time, it will help to evenly distribute these organisms allowing them to ferment properly.
On the other hand, after beer ferments, the sugar digested by yeasts turn out to be alcohol. While there are various species of brewer's yeast, cerivisiae is used most extensively. The brewer's yeast either settles on the top or bottom of beer during the brewing process, thereby significantly affecting the flavour of the beverage. It has been found that brews that are "top-fermenting" have a tendency to be fruit-like and they ferment best at elevated temperatures, whereas the organisms that are considered to be "bottom-fermenting" make lager or dark beer and they ferment in cooler climatic conditions.
Till the World War II, people used yeast in fresh cakes, which helps to keep the cakes viable for 10 days. The yeast goes bad only after this. Even now many professional bakers use the fresh form, but these days, cakes are usually made with dry, active yeast, which has a longer shelf live compared to the fresh form. In fact, most home bakers welcome and use the active dry yeast. The organisms contained in this blend are dried very carefully and they would revitalize when placed in warm water. As a result, they last longer. Nevertheless, if the water temperature is not maintained between 105°F and 115°F (roughly between 40°C and 46°C) the fungus will be killed due to thermal shock. In recent times, instant yeast (active dry yeast) has become very popular. It is worth mentioning here that this type of yeast does not require re-hydration and you can add it to dough directly.