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What Is Blockchain Technology

The blockchain is generally associated with Bitcoin along side other cryptocurrencies, but these are only the tip of the iceberg. And it’s that technology, which has its origins in 1991, when Stuart Haber and W. Scott Stornetta described the first work on a chain of cryptographically secured blocks, was not noticeable until 2008 when it became popular with the arrival of bitcoin. But currently, its use is being demanded in other commercial applications and annual growth of 51% is projected by 2022 in various markets, such as financial institutions or the Internet of Things (IoT), according to MarketWatch.

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What is blockchain

The chain of blocks, better known by the English term blockchain, is a single registry, agreed and distributed in several nodes of a network. In the state of cryptocurrencies, we can think of it as the ledger where all of the transactions is recorded.

Its operation can be complex to understand if we dive into the internal details of its implementation, but the basic idea is simple to follow.

In each block is stored:

  • several valid records or transactions,
  • information regarding that block,
  • it’s linking with the previous block and the next block through the hash of each block – a unique code that would be like the block’s fingerprint.

Therefore, each block has a specific and immovable place within the chain since each block contains information about the hash of the previous block. The complete chain is stored in each node of the network that makes up the blockchain, so an exact copy of the chain is stored in all network participants.

As new records are created, they are first verified and validated by the nodes on the network and then added to a new block that is linked to the chain.

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Why is blockchain so secure?

Being a shared technology, where each node of the network stores an accurate copy of the chain, the availability of the information is secure data all times. In the event that an attacker wants to cause a denial of service, they should kill all nodes on the network, since at least one of them is sufficient for the information to be available.

On the other hand, since it is a consensual registry, where all nodes contain the same information, it is almost impossible to alter it, ensuring its integrity. If an attacker wanted to modify the information in the blockchain, he would have to modify the entire chain in at least 51% of the nodes.

blockchain technology allows us to store information which can never be lost, modified or deleted

Finally, since each block is mathematically linked to the next block, once a new one is added to the chain, it becomes unalterable. When a block is modified its relationship with the chain is broken. That is, all the information registered in the blocks is immutable and perpetual.

In this way, blockchain technology enables us to store data that can never be lost, modified or deleted.

In addition, each node of the network uses certificates and digital signatures to verify the information and validate the transactions and data stored in the blockchain, thus ensuring the authenticity of said information.

In this way, we can look at blockchain as a scribe. A means to verify and confirm any type of information. A reliable, decentralized registry, opposing data manipulation, and where everything is registered.

Today we are used to centralized models. We give all our information to companies such as Google or Facebook to manage it, we send all our messages through the Telegram or WhatsApp servers so that they take care of sending them or we spend fortunes in notaries and institutions so that they certify and save our writings or important documents.

In the blockchain, the data is distributed in all the nodes of the network. As there is no central node, everyone shares equally, storing and verifying all the information. It is a very powerful tool to communicate and store information in a reliable way; a decentralized model where the information is ours, since we do not depend on a company that provides the service.

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What other uses are given to blockchain?

Basically, any type of information that needs to be preserved intact and must remain available to be stored on the blockchain in a secure, decentralized and cheaper way than through intermediaries. Furthermore, if this information is stored encrypted, its confidentiality can be guaranteed, since only those who have the encryption key can access it.

Use of blockchain in healthcare

Example, health records could be unified and stored on the blockchain. In this way, the medical history of each patient would be safe and at the same time available to authorized doctor, regardless of the health centre where the patient has been treated. Pharmaceutical industry can also use this technology to verify drugs and prevent counterfeits.

Using blockchain for documents

On the other hand, it would be very useful for the management of digital assets and documents. Until now, the problem with digital is that everything is easy to copy, but blockchain allows you to register all purchases, deeds, documents or any other type of digital good that cannot be forged.

Other uses of the blockchain

It can also revolutionize the Internet of Things (IoT) market, where the challenge lies dur to millions of devices connected to the Internet that must be managed by the provider companies. In a few years, the centralized model is not going to support so many devices, in ordernot to mention that many of them are not secure enough. With blockchain, devices can communicate through the network in a direct, secure and reliable way, without any intermediaries.

Blockchain allows verifying, validate, track and store all kinds of information, from digital certificates, democratic voting systems, logistics and messaging services, smart contracts and, of course, money and financial transactions.

Currently, there are already ongoing projects that are worth investigating:

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  • HyperLedger Project

It is a consortium of large companies seeking to explore blockchain-based solutions. They have several active projects.

  • R3 Cev

In this case, the 40 largest banks in the world have come together to seek solutions to their financial processes based on blockchain. In addition, they have reports and research on this technology.

  • Storage

The first blockchain-based storage initiative is available to anyone. User data is encrypted and stored on the blockchain for preservation.

  • Proof of Existence

This is an online certification service for any type of document. It offers the possibility of saving a document on the blockchain, which can never be altered or deleted.

According to a survey by the consulting firm Deloitte, 74% of the companies consulted see blockchain an improvement for the business and plan to invest in this technology, while almost half of them already have some implementation of blockchain in their business.

Without a doubt, blockchain makes the immutable and decentralized layer that the Internet has always dreamed of a reality. A technology that allows you to remove trust from the equation and replace it with mathematical truth.

 

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