Blockchain for beginners
Blockchain is the most revolutionary technology of these first decades of the 21st century, in the same way as it was the invention of the car in the early twentieth century or the emergence of internet and email at the end of the same century.
However, this technology is complex and difficult to understand for most people, including in some cases the same specialists in the area of computer technology. That is why in this article I will try to explain in the most accessible way possible what blockchain is.
Blockchain explained briefly and simply
The first blockchain that appeared was created for bitcoin cryptocurrency in 2009, as a result of the white paper written by a person or group of people under the pseudonym of Satoshi Nakamoto in 2008. This, of course, is the result of a series of studies and proposals given in previous years by various anarchist researchers and ideologists in computer science (cyberpunks and Timothy May), without forgetting what generated to millions of people the financial crisis of that same year 2008.
Blockchain can be defined as a distributed accounting technology or chain of blocks, which is nothing more than a distributed database, or to make it more evident to our imagination, as a kind of accounting book in which each page is represented by a block that stores the records of electronic operations that are made at a certain time.
This innovative technology has two particular characteristics: it is distributed and decentralized, which eliminates intermediation processes from trusted third parties to make transactions and P2P records, that is, between peers, from person to person.
However, this process of disintermediation is relative according to the type of blockchain: public or private.
The first is the one that was created for example with the appearance of bitcoin and allows all operations can be performed and verified (audited) by anyone. That is, they are open to the public and are managed thanks to the consensus of the parties involved without the presence of intermediaries.
The second is the one that is being studied by financial entities, companies of different types and governments to carry out different types of commercial or governmental activities, but they can only be used by a selected staff, since they are closed blockchains or private, which means that nobody can access the content without an authorization. This eliminates transparency, so important for the philosophy of this technology.
Classification of a blockchain
There are three types of databases: centralized, decentralized and distributed.
As an example for a centralized database we can think of a computer or server (node) of a bank, in which in a single team they register, verify, validate, store and distribute all kinds of information such as private data of clients and transactions. If this node is affected, all the information contained in it can be compromised.
A decentralized database is one in which there are several computers or servers (nodes) in which you can manage and distribute information without the need or existence of a single central node.
The distributed database is one in which there is an unlimited number of possible nodes in which each computer manages a copy of all the operations that are carried out in the network, without there being a node that may have some privilege over the others and where decisions must be made in consensus among the participating parties to carry out the activities assigned to this network.
As it turns out, blockchain has the last two characteristics, as it was already said: it is decentralized and distributed.
The blockchain in action
In order for a distributed and decentralized blockchain to operate, computers (nodes) are required to verify, validate, store, distribute and keep a complete copy of the operations that are carried out in the blockchain, which are stored in blocks. Once created, the information contained in them has already been validated, is permanent, unalterable (it can not be deleted, rewritten or modified in any way), remaining encrypted under a complex data encryption system thanks to a novel technology known as cryptography, which offers security and reliability to protect identities and transactions.
In the previous example we can see how the subject A carries out a transaction with the subject B. The nodes receive the information corresponding to that transaction in a public P2P network and then validate the operation with complex algorithms that will allow that, once the same, the transaction is combined with others to create a new block of data, which is added to the chain of blocks (blockchain), where it will be unalterable permanently. In this way the operation between subjects A and B is solved satisfactorily in seconds or minutes.
List of uses of a blockchain
A blockchain can have many uses, some already applied, others to apply or see how it can be used in various areas of human knowledge, which makes it a technology yet to be discovered.
Transactions and payment systems
Smart contracts and decentralized applications (Dapps)
Internet of things
There is something important and it is the fact that a cryptocurrency has value thanks to the blockchain technology that supports it, which means that when using a cryptocurrency we must necessarily know, study and understand what is the technological project that accompanies it and gives it his sense of being, his existence and use.
Post originally published on busy.org