What is blockchain: the definitive explanation for the most fashionable technology

What is blockchain? Among other things, it is one of the buzzwords in recent times. The blockchain is also a concept that poses a huge revolution not only in our economy, but in all kinds of areas.

Understanding what this chain of blocks is is not that difficult, and given that this concept is being used more and more, we wanted to do a kind of quick introductory course to blockchain , to explain what it is, how it works and what is the revolution it poses. the chain of blocks.

Goodbye, mister (banker) intermediary
Let’s put ourselves in situation. The normal thing is that if a person called, for example, Mariano wanted to send 1,000 euros to another person called, for example, Luis, the normal thing is that the operation be carried out through a bank. Blockchain development company That bank acts as an intermediary for that and many other transactions , effectively centralizing the movement of capital from one place to another.

Banco
Mariano would ask his bank to withdraw 1,000 euros from his account and transfer it to Luis’s account: in just a few hours (depending on the bank, of course) that bank will have recorded the transaction in his account , subtracting 1,000 euros from his account and informing the other bank that it must add 1,000 euros to Luis’s account. Someone at Luis’s bank (by now, we already know that someone is a computer program) will note that there are 1,000 more euros in Luis’s account from Mariano’s bank account.

This management has not required a transfer of bills from one place to another, but there have simply been one or two banks that have been in charge of making the money pass from one to another with a simple change in the balances of their accounts . Everything great and fantastic, except for one problem:

That neither Mariano nor Luis have any control over the process , of which only those banks have all the information. They both depend on those banks and their way of doing things to complete that transaction. They are bound by your terms (and your commissions, of course).

Bitcoin, blockchain and cryptocurrencies, explained in a simple way (and in video)
IN XATAKA
Bitcoin, blockchain and cryptocurrencies, explained in a simple way (and in video)
hello blockchain
This is where the blockchain comes in, which basically eliminates the middlemen , decentralizing all management. The control of the process belongs to the users, not to the banks — we are still talking about money, but the example can be extrapolated to other types of transactions — , and it is they who basically become part of a huge bank with thousands, millions of nodes , each of which becomes a participant and manager of the bank’s account books.

Blockchain2
So what is the blockchain? Well, a gigantic account book in which the records (the blocks) are linked and encrypted to protect the security and privacy of transactions. It is, in other words, a distributed and secure database (thanks to encryption) that can be applied to all kinds of transactions that do not necessarily have to be cheap.

This chain of blocks has an important requirement: there must be several users (nodes) that are in charge of verifying those transactions to validate them and thus the block corresponding to that transaction (in each block there is a large number of transactions that, yes, is variable ). ) is recorded in that gigantic account book.

This is how a transaction works on the blockchain
The process is relatively simple, but as we say it involves more people. Now Mariano and Luis are not alone, and they will be part of a large group of users who are in charge of checking that the entire process occurs as it should.

Blockchain
If Mariano wants to withdraw a bitcoin from his account to give it to Luis, he first lets everyone know with a peculiarity: nobody knows that Mariano is Mariano and that Luis is Luis . They only know that from a digital wallet (which would be a bank account) they want to transfer that amount (which is known) to another.

Mariano, therefore, warns of his intentions, but without revealing his identity: “Hey guys, I want to send a bitcoin from my wallet to this other one, please update your account books!” When sending that message, all users on that network first check thatMarianothe source wallet has enough money to send to the destination wallet. If so, Blockchain Development services everyone notes that transaction, which becomes complete and becomes part of the transaction block . Of course: they are not yet definitively registered in that database.

As time passes, more and more transactions are completed and moved to that block, which has a limited capacity that depends on the structure of the blockchain and the size of each transaction. When a block does not support any more transactions, an important moment arrives: that of “validating” or “sealing” it, which is what users do when mining bitcoin.