Blockchain technology has become very popular in recent years. It has been a decade since he was with us and with the rise of cryptocurrencies his name has begun to become increasingly known. However, many people do not have a clear idea of what this technology is.
What is a blockchain?
A chain of blocks or BC -blockchain- is a database distributed and linked in chains in which, as if it were a book ledger, a detailed record of all the operations carried out in it is kept.
All this information is stored in linked data blocks as a string that is encrypted cryptographically so that they cannot be modified or altered in the future in any way.
The blockchain technology works like a huge accounting book, similar to Excel, which allows us to store data, transmit it and confirm it. These are the fundamentals that allow us to store, receive, send and mine cryptocurrencies.
The concept of blockchain was mentioned for the first time in 2009 when bitcoin was defined as a currency of a chain of blocks. Since then his model has been copied and tried to improve giving birth to different cryptocurrencies.
The most remarkable thing about the blockchain technology is its security, since the data is stored in several computers, which would make it impossible to modify all the backup copies of the network to its own benefit.
The blocks are ordered in chronological order and each has a hash (numerical password) from the previous block, which makes it impossible for a block with a failed hash to be introduced in the chain and replicated by the nods or other computers in the network.
This explains a little the function of the nods or mining computers of the network. These are responsible for creating the blocks of a transaction by deciphering the hash of the previous block as well as all the data of each new transaction that is made.
In short, a miner breaks down the data of a transaction and converts it into blocks of data that will be linked to the chain in chronological order.
Applications of blockchain technology
Blockchain technology is currently used in various fields that go beyond cryptocurrency. Some of them are:
- Cryptocurrencies: in the world of cryptocurrencies works as a notary public that is responsible for ensuring that a currency cannot be spent twice. All cryptocurrencies use it, although each with its respective rules.
- Database of name: it is an alternative to the DNS system that we all know. It allows establishing a name to an object and that it identifies with it for each action.
- Smart contracts: works as a database of applications that create intelligent contracts.
Characteristics of blockchain technology
- Decentralized technology: the blockchain technology is not governed by any government nor does it require the confidence of any financial institution.
- Consensus network: The scalability of the blockchain network is high. This means that its integrity is based on consensus.
- Open source system: anyone can get the blockchain technology code and use it.
- Security: is related to the technology of distributed registration that makes the information of each chain is insured.
Utility of blockchain technology in the future
The premise that this is the technology that will change the world could be right. The possibility of an accounting system impossible to modify after being determined and open source makes it an alternative to be used in:
- The electronic vote: in the elections of the countries the technology could change the way in which the users execute the suffrage. As with bitcoin, the chain of blocks would ensure that no voter can do it more than once no matter where they are.
- Increase transparency of commercial operations: the blockchain technology would create a more transparent distribution network in which the origin of the product and its cost are always visible.
- Cooperative economy: Blockchain technology can make transactions between peers easier, allowing the creation of more participative business models.
- Ecommerce: for e-commerce stores the blockchain could be an alternative to reduce costs by eradicating the figure of an intermediary to process payments.
The big companies are betting on it
The blockchain technology seems to have come to stay for a long time. Companies as momentous as IBM or Microsoft are currently investing in this technology and if they succeed could make other brands get on the boat or born a new leader in the technology market thanks to the blockchain.
The impact on global finance is evident to the point that there is a market that moves billions of dollars a year. Analyzing completely the repercussions of the blockchain technology can be hasty because it is a relatively new system (less than 10 years old), but for now everything seems to end up getting stronger over the years.