Blockchain: what it is, how it works and applications

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Blockchain: Being a relatively recent technology, since it was introduced in 2008, Blockchain is a data verification method that makes it possible to prove the authenticity and provenance of data, so that, for a transaction to be validated, it needs to present all the information relative to each movement, which in turn, inhibits fraud or duplication.

What is Blockchain?

Blockchain is always associated with Bitcoin, since it is the technology that allows mining and transactions using virtual currency. In other words, Blockchain is what guarantees that a given user owns a certain amount in Bitcoin, as well as what validates the transfer or payment using the virtual currency.

But of course, Blockchain goes far beyond Bitcoin. After all, the technology allows data validation in a very efficient and decentralized way, which meant that the technology could be considered as a verification method in several segments.

How does Blockchain work?

The data in the Blockchain obeys a standard so that they can be verified and validated at any time, causing a chain of information to exist that necessarily needs to be associated with each one of them, in order.

This order makes it impossible to cross the data chain, since, for a data to be validated, part of the information is in the previous data and part in the next data.

This cascading organization allows greater reliability throughout the system, as it is not possible to insert data randomly into the Blockchain. Therefore, a transaction can only be carried out once, inhibiting duplication and even fraud.

It’s safe?

Let’s imagine that we arrived at a location that offers service passwords, so that, these passwords bring in addition to a number that orders the arrival of users, date and time information for removing the password. That is, in a single data it is possible to know when the user arrived, who arrived before and who should be next.

Blockchain works in a similar way, so that data can be validated basically in the same way as a password, since each one of them presents information about its origin and cannot be duplicated.

As we have seen, it is practically impossible to defraud a movement through Blockchain, which has led financial institutions to consider the validation modality for their movements. In addition, the method allows data verification in a very efficient way, which can be used to validate certificates and even virtual documents and contracts.

The technology is not yet used on a large scale outside the cryptocurrency universe, but the tendency is for there to be an expansion of the validation modality, since it is an extremely safe way to guarantee the reliability of information transmitted over the internet, including being an alternative for security of connected devices.