What is Blockchain Technology?

Posted by

The blockchain, more commonly known as Blockchain, is a technology that records information or money transactions through a fully decentralized system without the backing of any intermediary or central authority that certifies the content of such transactions, in a kind of Public record book that includes all transactions and is distributed among many parties belonging to that network, without a trust relationship between them. It is a technology that is transparent, immutable and permanent. The information can only be added in that book if it has the consensus of the participants, being impossible to modify or delete information.

Its creator (or creators) is the mysterious and unknown so far Satoshi Nakamoto, who posted this article on an internet forum in 2008 where he announced the use of the Blockchain as the basis for the operation of the most accepted virtual currency so far: Bitcoin.

How is a transaction carried out through Blockchain?

In a centralized system, when we make a transaction, there is an intermediary that supports that transaction (a bank certifying that we have money in our account to make a bank transfer, for example). That intermediary has personal information about us that may jeopardize our privacy in case of hacking. Each of the transactions (for example, a transfer from one user to another, the sending of information from one user to another, etc.) are packaged in a block. The blocks consist of three parts:

  1. The hash of the previous block: the hash is a cryptographic code or key composed of the encrypted information that contains the block that was created immediately before this block;
  2. A package consisting of all the transactions that have been recorded at a specific time: each transaction will consist of the public key of the users and the amount of the transaction, all well encrypted and encrypted

In the Bitcoin network, there are currently around 10,439 nodes. The United States is the country with the most nodes, with 2,549. To close the block you have to solve a very complex mathematical problem in which you have to find a final code. When a miner solves the mathematical problem and after the verification of at least 51% of the miners, he will receive his reward. In the case of Bitcoin, if a miner closes a block, he will receive 12.5 bitcoins that in exchange are 39,732.47 Euros. Do not you think an incentive more than attractive to be a miner? In fact, surely some readers will be encouraged to undermine some block. In 2009 you could mine with a powerful computer from home.

With the passage of time, the mathematical problems to solve to close the block are increasingly complex and rooms full of very powerful processors are needed to find the cheap assignments solution to that problem and receive the reward, apart from the energy expenditure that this entails, one of the biggest criticisms that this technology receives.

Once the block is closed, the block goes to the accounting book just behind the previously closed block; hence this technology is known as a blockchain. On average, a block takes about 10 minutes to close. After those 10 minutes, all transactions included in that block will have reached their recipient.

What applications does Blockchain technology have beyond cryptocurrencies?

The Blockchain technology was implemented in the virtual currency Bitcoin. After it, more than 1,000 cryptocurrencies have been developed. The best known are Ethereum and Ripple. On the one hand, Ethereum uses the improved Blockchain technology and has developed what is known as smart contracts or “Smart contracts”, which could be applied very soon in the insurance sector, in the real estate sector, etc.

Blockchain and ocular biometrics are used so that refugees can use virtual currency within the refugee camp, receiving money in a safer and less expensive way, as well as eliminating the possibility of old paper bonds that They were given stolen, sold or forged. On the other hand, Blockchain is also being used by the Climate Chain Coalition, promoted by the United Nations Climate Change Program to advance collaboration among members to strengthen monitoring, verification, and reports that measure the impact of actions that are being carried out to stop climate change.

Although Blockchain technology is still in the experimental phase, Blockchain is here to stay. At the moment its consolidated implementation is Bitcoin, a currency that has depreciated 30% during the past week. Its complexity is excessively complex, its cryptographic and economic design is very important.

Disclaimer : This and other personal blog posts are not reviewed, monitored or endorsed by Cryptoknowmics. The content is solely the view of the author and Cryptoknowmics is not responsible for the authenticity of content of this post in any way. Our curated content which is handpicked by our editorial team may be viewed here.

Leave a Reply

Your email address will not be published.