What is blockchain? Everything you need to know

What is blockchain?

Like much of the world of technology, cryptocurrencies like Bitcoin still depend on some kind of database that can track large volumes of transactions and keep them secure. The solution used by many of the largest digital currencies in the world is the blockchain.

Implemented for the first time in 2009, the technology consists of & # 39; blocks & # 39; that contain lots of transactions with timestamp, with each block linked to the previous one through the cryptography, thus forming a chain.

As the world becomes increasingly intelligent, connected cryptocurrencies have become an increasingly attractive proposition for growing markets that may not have a traditional banking infrastructure. Several third world developing nations have implemented blockchain-based national currencies, and the technology is also used by various charities to help those without bank accounts.

However, blockchain also offers the possibility of creating a fraud-proof system for transactions exchanges. Therefore, it offers a great potential for use outside the scope of the digital currency, which helps attract the interest not only of traditional financial institutions, but also in areas as diverse as manufacturing, food production and many more. .

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How does Blockchain work?

A blockchain system consists of two types of records, transactions and blocks. The transactions are simply the actions carried out in a particular period, these are stored together in a block.

What makes blockchain more unique is that each block contains the cryptographic hash of the previous one, forming a chain. What a cryptographic hash does is take the data from the previous block and transform it into a compact string. As these chains are impossible to predict, it means that any alteration of the chain is easily detected.

This method means that the blocks do not need to have serial numbers, the hash allows them to be uniquely identified as well as to verify their integrity. Each block confirms the validity of the previous one directly to the call & # 39; block of genesis & # 39; at the beginning of the chain.

However, linking blocks is not the only thing that keeps the chain secure. It is also decentralized, each computer with the installed software has a copy of the chain of blocks that is constantly updated with new blocks. There is no centralized server that has the transactions and because each new block must meet the requirements of the chain, no one can overwrite the previous transactions.

You can add other transaction requirements to define what constitutes a valid entry. In Bitcoin, for example, a valid transaction must be digitally signed, you must spend one or more unspent exits from previous transactions, and the sum of transaction exits can not exceed the entry sum.

What are some of the biggest blockchain databases? ?

Blockchain has grown in popularity in recent years, gaining sponsors in the technology and financial sectors.

Far from Bitcoin, which is still the most widely known and debatable network most widely used, this has led to a number of alternative blockchains in recent times.

This includes R3, which is developing blockchain-esque technology that can be used by major banking institutions, and in May of 2017 raised $ 107 million in funds from sponsors such as Intel. , HSBC and Bank of America.

Another important player is Hyperledger, an open source collaboration between different industries created by the Linux Foundation to popularize blockchain-based ledgers, with the first generation of its technology launched in July 2017.

The rest- The so-called "big four" accounting firms have also said they are testing blockchain technologies, although so far only Ernst and Young have made their technology public, putting a digital wallet at the disposal of all their Swiss employees.

IBM announced in March 2017 that it will build its own offer & # 39; blockchain as a service & # 39; based on Hyperledger, which will allow customers to build secure blockchain networks.

Earlier this year, the London Stock Exchange also revealed that it was ready to start using blockchain to improve transparency for shareholder information among unlisted companies, showing the impact that technology has had.

How safe is blockchain?

Due to its advanced cryptographic protection systems, in theory, blockchain offers a much safer experience than traditional banking.

The fact that the technology is decentralized, and can not be altered retroactively or edited makes it ideal for financial transactions and important information storage.

Blockchain also benefits from being able to preserve user privacy, however, unfortunately, this has made it increasingly popular as the preferred payment method by cybercriminals, as a node of
the Bitcoin network does not have to disclose the identity of the person who makes or receives the payments.