You are one step away from knowing everything about the Blockchain. Now that you know its definition and the main characteristics and related terms, it is time to gather everything you have learned to discover how it works. Take note!
The jack, horse, king of transactions
Networks use peer-to-peer data exchange technology to connect different users who share information. That is, the data is not centralized in a central system but shared by all network users. When a transaction is carried out, it is recorded as a block of data transmitted to all parties to be validated.
The transaction is the movement of an asset, and the block can record the chosen information, from what, who, when, to where, how much, and how. Each block connects to the previous and subsequent ones forming a chain (Blockchain), like a kind of indelible record. Each additional block reinforces the verification of the previous one and eliminates the possibility of being tampered with. Finally, the transaction is carried out.
The structure of the blocks
The chain stores a lot of information, which allows it to grow over time. This is why it has been necessary to create efficient query mechanisms without having to download all the information: the Merkle hash tree.
It is a tree data structure that allows many separate data to be related to a single hash value, which provides a very efficient verification method on the contents of large information structures.
Generation of the chain blocks
First of all, it is a decentralized process. And for this, a distributed consensus is needed in which the nodes can generate valid data. Users must become nodes within the system to be able to issue new operations. If what they want is to become miners and create blocks, then they must compete with others. The validation process is based on asymmetric cryptography, with a public and a private key. The issued transactions are validated by the nodes in the newly mined block and their correct binding to the previous block (it must contain the hash).
The most common uses of the blockchain
“But if this technology was created for cryptocurrency operations.”
Yes, but the passage of time, research, and social needs have seen great potential in this technology to be applied in other areas:
Some states like West Virginia are launching electronic voting through the Blockchain, although it is still a regulatory framework. However, you don’t have to go that far. After the last elections to the Madrid Assembly and the COVID-19 pandemic situation and its restrictions on mobility and the gathering of people, they have proposed the establishment of electronic voting with Blockchain. Its traceability and immutability make it a beautiful system for voting. Not only would it increase transparency and reliability, but you could audit in real-time.
They are programs that allow fulfilling and execution agreements registered between the parties automatically. They can be applied in any transaction where a registered agreement is necessary, such as a guarantee deposit or the contracting of a product, among others. Among its main characteristics, we find self-execution and immutability. Learn about some examples of smart contracts in Spain at this link.
Supervision and monitoring in food chains, as well as in production, is one of the leading applications raised with Blockchain. Some examples of this technology in the food and agricultural industry are Walmart China, with food production constituted by IBM, or the Australian AgriDigital, which works with distributed ledgers, Blockchain, and Smart Contracts.
It is not what has already been done but what is yet to come. At Occam Agencia Digital, as a blockchain development company, we are convinced that it is not just about programming but about analyzing the client’s needs and designing a unique user experience.
How can you take advantage of the advantages of the Blockchain in your business? Let us know your doubts; we can help you solve them.
Tokenization of real estate and assets
Thanks to the transparency of the Blockchain, the tokenization of assets is revolutionizing traditional sectors such as investment in real estate, democratizing their purchase.
This breaks the barrier of investing in safer assets since, so far, you had to do it alone or among a tiny group of people if you wanted to buy a property. Thanks to tokenization, you can now buy a flat between 100, 200, 1000 people by making a small contribution.
This also allows you to diversify and minimize risk, being able to invest € 100 in various properties.
It is essential to choose a blockchain development company that has developed a project using this technology since these are complex developments with very little online documentation to help developers.
What are banks doing about the Blockchain?
The financial sector has finally detected the disruptive potential that this technology will have in its industry. Almost daily, there are new investments in this sector. In just one month, this section could be out of date in terms of references.
BBVA with Coinbase, Bankinter with Coinffeine, and Santander are some examples of giants of Spanish banking, who have bet in the form of investments to better understand Bitcoin and its role in the present, above all, the one it will play in the future.
We also see how one of the leading Estonian banks develops a wallet that uses Bitcoin to allow free and instant money transfers.
Do you know which banks are betting heavily on the Blockchain?
We can think even further by putting on the table medical records, voting, property records, marriage certificates, or litigation managed by the Blockchain.
Eventually, all data sets and digital transactions could leave their “fingerprint.” Creating an easily auditable trail of every digital event that takes place in history without compromising anyone’s privacy.
Here is a video that visually illustrates its internal workings at a theoretical level:
It seems clear that if Blockchain as a concept survives the enormous hype it is causing, it could introduce a level of democracy and objectivity in the digital world hitherto unheard of and unattainable in the ‘physical world.’
The promise that he makes us implies a future in which no one has absolute power in the network, and no one can lie about past or current events.
Also, remembering the initial example of a text document with two columns, where “ABC” corresponds to “34,”; You have to note that it has not been indicated at any time that they are those “34”. This is because Blockchain is agnostic; it serves to keep an accounting of things. Then, depending on the case, the “surname” or connotation that is desired or that each ecosystem deems appropriate will be associated with it. Along these lines, in the Bitcoin ecosystem, the Blockchain transports bitcoins, which have a price based on a quotation that people give it. But this accounting could be used for countless cases: company stocks, local currencies, homeownership, diamond identifiers, identities. The potential is only limited by imagination. After all, Blockchain is a distributed ledger that allows value to be transported.