Bitcoin and its Technology

Apr 17, 2019


What is Blockchain?
 
It is a kind of large "book" that records various types of transactions and has its records spread across multiple computers. In the case of encrypted coins, such as bitcoin, this book records the sending and receiving of values. To facilitate, the following analogy can be made: the "pages" of this "accounting book" are stored in several "libraries" scattered around the world; therefore erasing the knowledge present in it is an arduous task.
 
This system is formed by a "block chain". A set of transactions is placed inside each of these blocks, which are locked by a strong layer of encryption. On the other hand, the blockchain is public, that is, anyone can check and audit the movements registered in it.
 
How does Blockchain do these transactions?
 
All the transactions that happen in the blockchain are gathered in blocks. Each block is connected to the previous one by a link, a code called "hash". Together, they form a "chain of blocks," or "blockchain." Those responsible for setting up the "blockchain" are the so-called miners.
 
They gather the transactions that are being included in the network, but have not yet been placed in a block. The miner's job is, among other things, to calculate the right hash to form the bond between the blocks. Since the calculations are quite complex, there is a very high computational cost.
 
Is Blockchain a Secure Technology?
 
Any transaction made by blockchain can only be validated when a whole "block" is filled with transactions. That is, only this way it is possible to make a digital coin leave one person's hands and go to another person. Because these blocks are sealed by cryptographic codes, it is practically impossible to break the secret of these receptors.
 
This ensures, for example, that:
- every coin reaches the right destination;
- a coin is not used more than once;
- transactions do not change without compromising the entire chain.
 
How did the Blockchain come about?
 
Blockchain came out in 2008 to allow bitcoin to be created. According to the document describing the operation of bitcoin, it is "a network that marks the timing of transactions, putting them in a continuous chain in the hash, forming a record that can not be changed without redoing all the work."
 
In bitcoin, it can be understood as the set of rules that make the coin work. It is this that determines, for example, how many transactions are required to fill a block.
 
But is it used only on bitcoin?
 
No, several other digital coins came up using blockchain logic. Does the blockchain only serve virtual currencies? No, it can have multiple applications.
 
Several segments of the economy have already shown an interest in technology. For example, a load of soybeans shipped from the United States to China became the first agricultural shipment that had all its stages registered in blockchain.
 
Another example that blends applications and virtual currencies is ether. It is a cryptographic currency that feeds ethereum, a blockchain of connected applications, which are programs that run as long as there are those who supply them with ether.
 
What is the view of big banks about the Blockchain?
 
They have sympathy for technology. JPMorgan has a project to deploy a blockchain for its processes, as well as several other giant banks such as BNP Paribas, HSBC, Santander, Bank of America, ABN Amro, Goldman Sachs, Credit Suisse and Morgan Stanley. 

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