What is blockchain used for?

What is blockchain used for? The Blockchain is a technology that allows the transfer of data in a completely secure way thanks to a very sophisticated coding. It is usually compared to a company ledger where all the inflows and outflows of money are recorded. Of course, in this case, we would be talking about a digital event book.

To talk about Blockchain is to talk about the technology (the information coding system) that is behind Bitcoin. However, its function goes further. It can also be used to create other cryptocurrencies that are based on the same principles, but have other properties (policy, algorithm, etc.).

The Blockchain contributes to a great novelty. The fact is that this transfer does not need an intermediary to verify and approve the information, but rather it is distributed in several independent nodes that register and validate it. Thus, once the information is entered, it cannot be deleted, only new records can be added. Furthermore, it will not be legitimized unless the majority of them agree to do so. The latter is considered mission impossible.

How does the Blockchain work?

1. Transaction

Two parties, Mary and John, decide to exchange a unit of value (a digital currency, such as bitcoin, or another digital representation of some other asset, such as an educational / professional degree) and start a transaction.

2 blocks

The transaction is sent with other pending transactions creating a "block". The block is sent to the network of computers participating in the system.

3. Verification

These computers (also called "miners" in the Bitcoin blockchain) value transactions and, through mathematical calculations, indicate whether they are valid, based on agreed rules. When they reach a “consensus” the transactions will be considered verified.

4. Hash

Each verified block of transactions is temporarily sealed with a cryptographic “hash”. Also, all blocks contain references to previous block hashes, thus creating a chain of records. Said chain will never be classified, it is considered impossible.

5. Execution

The unit of value is moved from Mary's account to John's account.

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