Blockchain is the technology of cryptocurrencies. In recent years the most expensive cryptocurrency is the Bitcoin, has become very popular. Is the future a currency to be traded in both the digital and real world?
The technologies around the blockchain radically transform the way the economy is organized as they create the technological possibility for the existence of a distributed form of trust. This is extremely important, as it can affect the traditional trusted authorities, transactions and electronic services.
With blockchain technology, the trust that existed until now due to a contractual relationship is created due to the distributed and secure way of storing, managing and exchanging information and conducting electronic transactions.
A new change is taking place in all the existing financial and business models that we all use every day. Blockchain technology can be applied in a number of sectors of the economy and society. Financial institutions, business groups, people in economics believe that this is the future currency.
Technical characteristics
Blockchain is a distributed ledger, public or private, in which transactions or data are linked together in linked blocks of data making them virtually unchanged and unambiguously from all the nodes to which the directory has been updated.
Distributed Ledger
Blockchain platforms do not use a centralized database; instead, each node has a copy of the ledger that resides on the peer-to-peer network. Cryptocurrencies, such as Bitcoin ledger, only store balance information in the distributed ledger. However, other platforms can, in fact, are already storing other information. Blockchain platforms, such as Ethereum can store any information in the distributed ledger. Some examples are:
• Identity information
• Patient information
• Real estate information, etc.
Private Ledger
When there is a central authority managing access to the ledger, it’s then called a private ledger, also known as a permissionless ledger. This is of course not a peer-to-peer network, and you would have to ask for permission from the central server to have access to a copy of the ledger.
The blockchain ledger is visualized as a series of blocks which are connected with each other. These blocks are encrypted with the SHA-256 secure hash algorithm, which mathematically encrypts and fragment the block information in a way that cannot be reversed (one-way encryption), always with a fixed result or data that posted is a character or text from an entire book.
In this way we achieve the distribution and updating of all nodes with the latest copy of the blocks as well as the security of data from changes and disputes.
Each block is cryptographically linked and digitally signed by each node to its predecessor and any attempt to change the data of a block would be impossible as it could not be cryptographically confirmed by any node as a whole.
Key Points
- The hash of each block comes from the contents of the block ending in the first block which is called genesis block.
- Each block refers to the hash of the previous block, not a sequential number
- The data in a blockchain is internally consistent, meaning you can perform some checks on it, and if the data and hashes do not match, then there has definitely been some change, which will not be confirmed by the blockchain chain to all of them. information nodes.
How is the data transferred?
Every single device that is connected to the internet, and running blockchain, becomes part of the network. This way all those devices can communicate with each other using the internet, and keep on updating each other. Because there is no master node or a centralized machine that has a different purpose than the rest of them, this network is called peer-peer network. However, because it has no master node of any kind, this is not a centralized network, but a decentralized P2P network.
Conclusion
In conclusion blockchain and Bitcoin are not the same things. Blockchain is a technology, and its first application was on the platform named Bitcoin. Bitcoin is blockchain. However, Bitcoin itself is only a cryptocurrency that is capable of replacing fiat currencies.
One of the most leading research and advisor company the Gartner, estimates blockchain will generate $3,1 trillion in new business value by 2030, but with the technology set to be ready for more mainstream adoption through 2023.
