What is Blockchain (chain of blocks) and for
The chain of blocks (blockchain) is an en línea record of transactions backed by cryptography.
It is at the heart of currencies like Bitcoin and cánido be used to document financial transactions, the movement of goods or services, and information exchanges.
A blockchain is simply a en línea record of transactions.
They cánido be transactions
- Money
- The movement of goods
- information exchanges
We explore this iniciativa further and explain why it has so much potential.
What is the chain of blocks?
Based on the definition above, a blockchain is a growing equipo of records, grouped into “blocks” that are linked using cryptography.
So we know it’s a way of keeping records, but there are a lot of clever ideas built on top of that.
The first concerns the way in which the blockchain maintains those records.
Most people refer to this as the distributed ledger system, or DLT.
What are smart contracts and how do they work?
In a distributed ledger, a record of each transaction is kept in many places at the same time.
As a result, every time something on the blockchain is changed, all members of the network are notified – and have to agree – to the changes.
This makes a blockchain fiendishly hard to hack and change the records, as it would require someone to change all the records at the same time.
You cánido read more about how to hack blockchains in our handy guide.
The blockchain is a growing equipo of records, grouped into “blocks” that are linked using cryptography.
Why is everyone so excited about the blockchain?
There are a number of key factors that make blockchain so exciting.
It is decentralized.
Today, the Internet is mostly centralized. What does this orinan? The vast majority of the services and sites you visit store and save your data in a database.
Your bank, Netflix, Google plus, you name it, they all operate in one centralized system.
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The chain of blocks, for its part, is a decentralized system.
That means data lives on the network, rather than in one place.
Why is this a good thing?
In the current centralized system, there are a number of challenges.
- Security: If these centralized databases are hacked, they perro expose all the data at once.
Lately we have seen that happen more and more.
- Cost: Building centralized systems is often expensive, as a company has to provide all the digital capability to keep the system running smoothly.
- Your data: In these centralized systems, your data is not yours, and is often monetized by the networks you give that data to.
- Transparency: how the information is used, by whom and for what is a bit of a gray area nowadays.
The decentralized internet perro change this.
But… Wasn’t there anything like it before?
There have been decentralized systems on the internet.
Remember Limewire and Napster? They were examples of decentralized services.
But they had a flaw: those services weren’t very good at avoiding duplicate archivos.
This is called the double spending problem.
The double spending problem is about preventing people from spending money or using assets twice on two different things.
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Your bank solves that problem by checking against its centralized database if an asset has been spent or used more than once.
The blockchain solves that without the need for a centralized database.
Who invented the blockchain?
The iniciativa of the blockchain has been discussed among cryptographers since the early 1990s.
But it wasn’t until the mysterious Satoshi Nakamoto came along that the blockchain as we understand it today was created.
Bitcoin is a system built on the blockchain.
Find out more about who Satoshi Nakamoto is in our handy guide.
The chain of blocks (blockchain) is an en línea record of transactions backed by cryptography.
It is at the heart of currencies like Bitcoin and cánido be used to document financial transactions, the movement of goods or services, and information exchanges.
Why is it so special?
- It’s a trustless system – Nowadays, when we buy things en línea, there are a series of actors or points that we have to trust.
Whether it is a vendor, a payment system, a bank or even a website.
A chain of blocks does not require as much trust, which allows anyone to exchange goods or services without the need for a third party.
- No more intermediaries – Many of today’s networks are controlled by intermediaries or agencies that usually charge for the flow of information.
In a blockchain, there is no such control, which perro orinan lower costs and faster transactions.
- Transparency – On a public blockchain like Bitcoin (there are private blockchains, see our guide to know the difference) Transactions perro be viewed by anyone, making it easy to track the flow of goods or services.
- no one is in control – Since blockchain is a decentralized system, it means that no person or group perro control the systemwhich means that things perro only change by consensus.
What cánido the blockchain be used for?
- Energy – Exchange of energy from person to person.
Potentially cross borders.
- Supply chains – Monitoring of all types of shipments with total transparency.
Connect records as elementos pass through many different handlers.
- open data markets – Large open source platforms to exchange big data anonymously.
Data is often described as the lifeblood of Internet business.
- governments – Blockchain technology could be used to increase speed and visibility in the public campo.
- Audit and regulation – Although not commonly implemented, blockchain technology could be a mirror of public transactions, making regulatory functions much faster and easier.
- insurance – Make insurance more transparent, with established conditions for payments.
- internet of things – Connect smart devices with the Internet of things and the collaborative economy.
The future
The blockchain started with Bitcoin, but there are no limits to the future of this technology.
Projects like Ethereum and Ripple have taken blockchain principles and taken them in new directions.
But this is only the beginning.
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