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It is one of the most powerful tools that exist today and still has much to offer. It has completely changed the way we do things, making the world a more interconnected place, protecting our privacy and security. A technology that goes beyond the economy and extends to all areas of society, from music or politics to health or bureaucracy. Find out what is blockchain and how does it work.
Something that not many people know is that blockchain technology was designed several years ago, in 1991. The pioneers, Stuart Haber and W. Scott Stornetta, published the document “How to Time-Stamp a Digital Document” that many consider the prelude to blockchain technology. However, it didn’t become popular until the emergence of bitcoin and despite its integration there are still certain doubts about if bitcoin is safe and anonymous.
What is blockchain?
The concepto “blockchain” defines its operation very well.
Blockchain is a technology that enables the transfer of digital data under complex coding, in a secure way. How? By creating a distributed account book in a computer network, without having a central server or database, and whose advances arise from the consensus between the parts that make up the network.
There is talk of “blockchain” because in the large accounting book that this technology creates all transactions are written down in blocks connected to each other. However, each transaction needs to be validated by several users (independent nodes) of the network so that the block ends up being registered in the account book.
Consensus, encryption and decentralization allow the blockchain to have very high security standards compared to other technologies.
How does blockchain technology work?
En primer lugar, se necesita de un software que permita a los ordenadores crear la red que haga funcionar la blockchain de forma distribuida. El hecho de no contar con un servidor central localizado implica que sea una red distribuida y que toda la información se encuentre disponible en todos los ordenadores conectados a la misma blockchain.
First, software is needed that allows computers to create the network that operates the blockchain in a distributed way. The fact of not having a centralized server located means that it is a distributed network and that all the information is available on all the computers connected to the same blockchain.
From time to time, the different transactions that make up a block are verified, so the block is validated by the independent nodes of the network (the famous mining). Each block contains:
- Multiple validated transactions
- Information regarding the block itself
- Information about its connection with the previous block and with the later one (hash).
Thus, each block has a specific and unalterable place within the chain and cannot be modified. The chain is always available on all connected computers, so there is no risk of losing data in case the network falls.
Infographic: How does blockchain technology work?
Open-source blockchains, such as Bitcoin or Ethereum, are accessible to anyone and, therefore, the information is public. Yes, when you buy cryptocurrencies online, blockchain technology is also present, this area is no an exception.
Those who know well what blockchain is and how it works, know the value that this technology brings to all fields of society: Internet voting, collaborative economics, notary services, the insurance sector, digital marketing, finance and a long etcetera.