- The blockchain is generally associated with Bitcoin and other cryptocurrencies, but these are only the tip of the iceberg. And it is that this 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 an annual growth of 51% is projected by 2022 in several markets, such as financial institutions or the Internet of Things (IoT), according to MarketWatch.
- What is blockchain?As its name implies, ‘blockchain’ is a chain of blocks, which contain encoded information of a transaction on the network. And, being intertwined (hence the word string), they allow the transfer of data (or value) with a secure encoding using cryptography. To illustrate this idea, it would be convenient to imagine an accounting book where all the inflows and outflows of money are recorded.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 case of cryptocurrencies, we can think of it as the accounting book where each of the transactions is recorded.Although the beginnings of the ‘blockchain’ are linked to the appearance of cryptocurrencies such as ‘bitcoin’, the truth is that this technology has spread to different economic sectors. Some of its concepts and principles tend to be somewhat complex.Its operation can be complex to understand if we delve into the internal details of its implementation, but the basic idea is simple to follow.
- In each block is stored:
- 1- Several valid records or transactions.
- 2- Information regarding that block.
- 3- Its link 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 participants of the network.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.
- Why is blockchain so secure?
- Being a distributed technology, where each node of the network stores an exact copy of the chain, the availability of the information is always guaranteed.
- If an attacker wanted 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, as 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 should modify the entire chain in at least 51% of the nodes.
- Finally, since each block is mathematically linked to the next block, once a new one is added to the chain, it becomes unalterable. If a block is modified its relationship with the chain is broken. In other words, all the information registered in the blocks is immutable and perpetual.
- In this way, blockchain technology allows us to store information 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 think of blockchain as a scribe. A means to certify and validate any type of information. A reliable, decentralized registry, resistant to 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 keep our writings or important documents.In blockchain the data is distributed in all the nodes of the network. As there is no central node, everyone participates equally, storing and validating 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.