BLOCKCHAIN: WHAT IS AND HOW IT WORKS?
The blockchain is usually associated with Bitcoin and other cryptocurrencies, but these are just the tip of the iceberg. And 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 notorious 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 for 2022 in several markets, such as financial institutions or the Internet of Things (IoT), according to MarketWatch.
What is blockchain
The chain of blocks, better known by the English term blockchain, is a single record, agreed upon 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.
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 it is stored:
- a number of valid records or transactions,
- information regarding that block
- its link to 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 unmovable place within the chain, since each block contains information from the hash of the previous block. The entire 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 the network participants.
As new records are created, they are first verified and validated by the nodes of the network and then added to a new block that is linked to the chain.
Why is blockchain so safe?
Being a distributed technology, where each node of the network stores an exact copy of the chain, the availability of the information is guaranteed at all times. In case an attacker wants to cause a denial of service, he should annul all the nodes of the network, since it is enough that at least one is operative for the information to be available.
On the other hand, being a consensual record, where all the nodes contain the same information, it is almost impossible to alter it, ensuring its integrity. If an attacker wants to modify the information in the block chain, he should modify the entire chain in at least 51% of the nodes.
blockchain technology allows us to store information that can never be lost, modified or eliminated
Finally, since each block is mathematically linked to the next block, once a new block is added to the chain, it becomes unchangeable. If a block is modified its relationship with the chain is broken. That is to say, that all the information registered in the blocks is immutable and perpetual.
In this way the blockchain technology allows us to store information that can never be lost, modified or eliminated.
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, which ensures 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.
Currently we are used to centralized models. We give all our information to companies such as Google or Facebook to administer it, send all our messages through the Telegram or WhatsApp servers so that they can send them or spend fortunes on notaries and institutions to 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 reliably; a decentralized model where information is ours, since we do not depend on a company that provides the service.