What is the blockchain? how does the blockchain work ?
The blockchain , or chains of blocks, is a concept that has been heard about in certain areas such as the economic and digital. It is a structure, used in computer systems, made up of data contained in blocks to which previous data is added, following a single time line.
Blockchain technology has its origins in the early 1990s when its creators Stuart Haber and W. Scott Stornetta published the first work on cryptographically secured blockchains .
However, it was not until 2008 that this term became much more popular thanks to the arrival of bitcoin . In the last year, interest in the blockchain has increased by more than 70% according to data from Google Trends.
According to the newspaper Expansión , more than 30% of companies are already using this type of technology or are considering using it in a short period of time and 78% of those who explore implementing it do so with the aim of developing new business models.
Understanding what blockchain is and, above all, what its main uses and advantages are, can be the key to starting to use this technology and bringing it closer and closer to the user. At slickmagnet we tell you all the details.
What is and how does the blockchain work?
Blockchain: the technology of change
As we said at the beginning, the blockchain is a data structure in which the information is grouped into sets called blocks, to which information related to the previous block is added following a single time line.
It is therefore a technology whose main use, so far, has focused on the possibility it offers to invest, explore and analyze the market for bitcoins and other existing cryptocurrencies, eliminating intermediaries. In this way, the chain of data blocks allows to decentralize the management allowing the user to control their own movements and investments.
The technology it uses, made up of blockchains, makes it possible to dispense with the role of financial entities as intermediaries in transactions, much more decentralizing the movement of capital worldwide. This means that, with blockchains, in the case of economic operations, it is the user himself who manages his money and who controls all the processes he wishes to carry out with it.
Although its most common use is the economic sector, the blockchain can be extrapolated to other sectors such as marketing and logistics .
What concepts to take into account to understand the blockchain system?
In order to clarify how this technology works, as well as the concepts related to it, we have compiled the main terms that are used to explain the blockchain and its operation:
We call each transaction that is carried out using this technology a transaction. All of them are registered in the blockchains.
Hashing is a cryptographic procedure in which a specific algorithm is used to transform data into an alphanumeric sequence. It performs a fundamental function since it guarantees the integrity of the transfers and records of information and provides computer security.
It is a database that records blocks of information and links them to each other, obtaining information from a contrasted block in the one that precedes it.
A block is the set of transactions carried out and confirmed whose data is added and included in the information chain. Each of these blocks is part of the chain itself, and gives it unity and cohesion.
The 3 main elements that are stored in each of those blocks: alphanumeric code, transactions and the code that links to the next block, produces the main information of the chain.
How do you get that type of blocks generated? Through mining blocks and nodes.
Those blocks that have the role of creating and verifying new blocks in the chain are called miners, looking for the necessary data through which they solve the previous block and find the corresponding hash.
A node is connected to the network and uses software to store and distribute updated copies of block chains. Each time a block commit is made to the chain, it is communicated to the nodes and a copy is added for storage.
Also Read: Six Trends In Cyber Security In 2020
How do blockchain transactions work?
Actions in the blockchain are carried out through single registries distributed in several nodes of the same network, both at the computer and user level. Three main elements are stored in each of them:
- The number of valid records and / or transactions made by the user.
- All the information for that specific block.
- The relationship and link with the previous block in the chain and with the next block through the hash (a unique code that is generated in each block, similar to a fingerprint).
These elements make each block of the chain created unique and unrepeatable , having a specific place that is immovable within said chain. Each block has its own identity and distinction .
The complete chain is saved and stored in each node of the network that is part of the blockchain, allowing all participants in the network to store an exact copy of that chain.
As new records are created within the chain, they will have to be validated and verified by the nodes of the network, in order to later be able to add them to a new block in the chain.
What are the main advantages of the blockchain?
It can be said that the main advantage of the blockchain system is the fact that transactions over the internet are carried out in a much more secure way and without the need for intermediaries .
Although the truth is that this block system has always been closely linked to cryptocurrencies, especially bitcoin, blockchains have great potential and a great future in other sectors, such as marketing, technological development and logistics.
- It is an incorruptible technology, that is, each transaction is immutable and it is impossible for it to be modified or eliminated.
- It is an immediate process for the user, since, since there are no intermediaries, the computer system is active 24 hours a day.
- It is a transparent system for users, since any movement that is made in the blockchains cannot be altered or eliminated.
- It helps to simplify the transaction system to a simpler and more intuitive accounting for its users.
- The quality of its systems and user satisfaction is high and reliable.
Blockchain technology and its great potential
According to experts, the blockchain system will be essential for most sectors in the not too distant future. Thanks to this technology, all electronic communications will be much more secure and transparent, ensuring all information in blocks.
At the moment, the blockchain is gaining ground and manages to consolidate itself as one of the technological phenomena of recent years. Only time and experience will give us the answer to its evolution and adaptation to the needs of users.
From slickmanet we hope to have contributed to clarify what the blockchain is and how it works.