Do you know what Blockchain is and how exactly this digital technology that everyone is talking about works? If you are part of the average Internet user, surely you are familiar with the famous cryptocurrencies, whose flow is based on this system, which is revolutionizing the way we carry out commercial transactions.
These represent in a “virtual” way a type of money generally far from any government and banking entity , which means that in this block chain technology, the only two protagonists of said transactions are the sender and the receiver, causing them to be eliminated the intermediaries.
But, as the concept of “Blockchain or Block Chain” and its operation will most likely be somewhat confusing to you, I have decided to explain its definition step by step, the different utilities that this technology can have for users or Businesses and, also, the why. what is so used in the digital economy and in the cryptocurrency sector.
What is Blockchain?
The Blockchain , which is also called “Block Chain” for its translation into Spanish, is a non-centralized P2P transfer coded network, which works through a technology that allows data to be transferred more securely and is based on decentralized blocks or nodes of linked and encrypted records.
In the case of cryptocurrencies, we can see the Block Chain as a chain of accounting books where each of the transactions (money inputs and outputs) are recorded. And once the information is entered in them, it can no longer be deleted, only new records can be added.
The chain can be said to work in a linear fashion, adding new transactions as it goes along , but making it impossible to modify previously recorded transactions.
An easy way to see this is if you compare the Blockchain to a ledger:
In it, a company records its movements in a linear fashion, registering one transaction after the other, but on a much larger scale, since the transactions carried out in the chain of blocks include millions and millions of people or “ nodes ”, as they are technically called.
Why does the Blockchain eliminate intermediaries?
As I already mentioned, there are millions of people who make up this “chain of blocks” and, in fact, it is they (which we will call “nodes”, assuming that each person uses a computer or equipment to connect to the network) who do such blocks may exist.
This is so because a large number of nodes are needed for transfers made on the network to be approved and recorded.
But, what relationship do these nodes or people have in the security of this technology?
Well, very simple: for a transaction to be registered, it must have been approved by the rest of the participants in each block.
The same happens if we want to make a change in the blockchain, the approval of the rest of the nodes is required to be able to approve said change, which is simply impossible.
Do you see why it is inherently secure and impossible to modify?
There is no way that a single person has a computer with a computing capacity greater than that of millions of people.
What advantages and benefits does the Blockchain have for a business?
Blockchain technology has a lot to offer the world, from a non-centralized economy with cryptocurrencies to more reliable electoral systems.
But what interests us in this opportunity is the benefits it offers to digital businesses :
1. Fast and secure payments
The main advantage it has is that it offers the possibility of making economic transactions quickly and safely.
This allows companies to offer a more global payment alternative to customers, without jeopardizing the security of both parties.
The use of cryptocurrencies to pay for products and services is an activity that has been growing for some years now.
In addition to security, it stands out because its transactions are quite fast and can be done from anywhere in the world, as long as there is an Internet connection, without the need to go through an intermediary (such as a bank).
2. Facilitates international transactions
As a consequence of the previous point, the Blockchain can be an excellent tool capable of helping you expand your business outside of Spain and Europe .
Although this is possible with other payment methods, it never hurts to have more alternatives. Furthermore, it is not only one of the freest methods, but also one of the most reliable.
3. Full transparency
Another great benefit that it offers is the possibility of implementing a completely transparent business system , and this is possible thanks to the fact that any change or record made in this P2P network can be seen publicly.
This, added to its inherent protection against unwanted modifications, makes it possible to maintain a true and reliable record of all the transactions carried out.
4. You reduce commission expenses
One of the inherent problems of using intermediaries in transactions is the cost generated by commissions that, although they are not always high on their own, when multiple transactions are made, add up to become a considerable expense.
With the help of the Blockchain system, intermediaries are eliminated and, therefore, the commissions they handle are also eliminated, which will help you greatly reduce the operating costs of your company.
5. You can store your important documents safely
I already mentioned that this methodology not only works to carry out economic transactions, and it is that with the Blockchain it is also possible to store important documents in a completely secure way, without the possibility of someone accessing them without your consent and, even less, to modify them.
In this way, you can store contracts, files that you do not want to lose, important company documents.
6. You will have an easy-to-follow accounting book
Each transaction that is carried out through the Block Chain leaves a public record that you can consult at any time, which provides you with a means to verify the different transactions that are carried out within the company in a reliable and secure way.
That is why, among experts in the field, Blockchain technology is often compared to an accounting book.
7. It is a completely private network
Unlike banking systems, with a network of this type you have complete privacy, since it works with cryptic encryption that allows you to maintain total anonymity , becoming one more node among millions, with nothing to identify you.
Even when making transfers in this P2P network, the only thing that is recorded is the data of the transfer itself, such as the date and the amount, among others.
This is another reason why people prefer to use cryptocurrencies, since they are a secure method of protecting the identity of those involved.
Ironically, during the beginning, he got used to criticizing those who used this type of virtual currency, because those who were ignorant of the subject considered these transactions ” illegal ” or that they were made for reasons of dubious morality.
However, over time, society has learned to accept that the use of Blockchain technology offers many benefits and advantages over more traditional systems, even Bitcoin began to be used more openly.
To the point that there are more and more countries that make it easier for users to use these virtual currencies .
How does Blockchain technology work exactly?
You already know what Blockchain is and what are the benefits or advantages it can have for your business, but how exactly does blockchain technology work?
During this whole process, none of the nodes knows that A is A, nor that B is B, they simply know that someone somewhere wants to transfer 1 Bitcoin from their wallet to some other wallet or wallet (Wallet).
Now, is it already registered and sealed?
Well no, there is still another step left, and that is to wait for enough transactions to occur in the block where A sent money to B, to saturate said block until there are no more transactions in it.
It is precisely at this point where the block is sealed and a new block is created for new transactions, and this is made possible by Bitcoin miners or any other cryptocurrency.
What are miners?
The miners are in charge of putting the transactions together in a block and then sealing said block to add it to the Blockchain as a complete set without possible future modifications.
This is a very expensive process, generally because it requires powerful equipment and a lot of electricity . Of course, the miners do not work for free, and for each block they successfully seal, they receive bitcoins or other cryptocurrencies as a reward.
It should be noted that each block is cryptographically sealed through a code called ” Hash ” , which serves to identify it safely within the chain.
In addition, each block stores in its code the “ Hash ” of the previous block, in this way the connection between each block is created.
In short, a block contains information about its own Hash that identifies it and the Hash of the previous block to be linked to the chain of blocks.
What would I have to do if I want to modify something on the blockchain?
First, similar to what must be done to make a transfer, if you wanted to make a change, more than half of the nodes belonging to the network would have to approve the change .
And of course, this will not be possible, since there are no reasons why the record of a transaction carried out should be changed.
What assures me that Blockchain technology cannot be corrupted?
This P2P network works in an exceptional way and is very secure thanks to the fact that all the records that pass through it are copied to the hundreds of millions of nodes connected to it.
How long does it take to complete a transaction in these types of systems?
When we read it, it may seem that this whole process would take time, however, these steps that must be followed to complete the transactions are done imperceptibly.
Therefore, it is impossible to even realize when the whole process occurs. As a result, you only see that you “ made a transfer ”, and everything that happens in between is uncharted territory.
The best thing is that the transfers will not take more than a few minutes to complete , something that does not always happen with banks.
Another interesting point regarding transactions on the Blockchain is that they do not have ” office hours “, they constantly work 24/7 without a single moment of rest, something that many will love, considering that some bank transfers can only be made during business days.
As you can see, the Blockchain is a revolutionary technology that since its appearance has caused great controversy, but above all progress within the world of the Internet.
More and more people are taking advantage of the blockchain for both personal and business use; there are those who even generate money mining within this P2P network.
The best thing is that it is a technology that is available to everyone and is very easy to use and understand, at least in the most basic aspects, since delving into the more technical aspects would make it more complex to understand than is really necessary. , but as long as you grasp the main idea of how it works, you have more than enough to take advantage of the Blockchain.