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Understanding Blockchain Technology

June 17, 2021 | Cybersecurity

In today’s context of digital transformation, everyone has heard of “Blockchain” at least once. A fairly new technology that has paved the way for Bitcoin, Ethereum, as well as modern cryptocurrencies. This article will present the technology, focusing on how it works and what are its possible uses moving forward.

What is Blockchain?

It’s a technology used for storing and transmitting information that is transparent, secure, and operates without a central control body. It first appeared in 2008 with the creation of Bitcoin, presented by a developer whose pseudonym was Satoshi Nakamoto. The technology can be interpreted as a database that contains the history of all exchanges made between its users since its creation. This database is secure and distributed. Meaning it is shared by its various users, without intermediaries, which allows everyone to verify the validity of the chain, and cryptography makes it secure. There are two types of Blockchain: public and private. The first type are blockchains open to all, such as Bitcoin or Ethereum. The private blockchains have access and use limited to a certain number of authorized actors, such as Hyperledger Fabric, a model of private blockchain created for corporations.

How does it work?

By grouping into blocks every transaction between users within the network. Each block is validated by specialized network nodes, using techniques that depend on the type of blockchain. In the Bitcoin blockchain, the technique used is called “Proof-of-Work” and consists of solving algorithmic problems. Once the block is validated, it is time-stamped and added to the blockchain. The transaction is then visible to the entire network. Theoretically, a block cannot be altered or deleted once it is added to the blockchain. This process guarantees the authenticity and security of the network.

What are its uses?

Although blockchain and Bitcoin were created simultaneously, the use of blockchain technology can be considered for purposes other than the exchange of digital money. The decentralized nature of the technology, coupled with its security and transparency, opens the path to many different applications. It can be used for the transfer of assets, as a record with a secure traceability of both products and assets, or for smart contracts: standalone programs coded in Go, JavaScript or Java, that automatically execute the terms and conditions of a contract between various parties. These contracts do not require human intervention once deployed and started.In summary, the possibilities of utilizing this technology are numerous and compelling for various industries such as banking, sales, insurance, voting, real estate and more. It opens the way to expanding the decentralized web concept and the economy that comes with it. However, it has its own economical, ecological, and even legal challenges which will certainly be further highlighted with the rise of the technology. 

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