When we talk about blockchain, we refer to a data structure in which its information is grouped into sets (blocks) to which information related to another block of the previous chain is added. It is a single and consensual registry, which is distributed in several nodes of a network.
Within each of the blocks, it is stored:
- The information regarding the block in question.
- A hash of the previous block, which gives integrity to the chain
- The link to the next block.
Cryptocurrencies, such as bitcoin, use blockchain in the ledger where each transaction is recorded.
Why is blockchain so secure?
Blockchain is a conceptually secure technology thanks to its distributed nature, irreversibility of transactions and heavy use of encryption.
Who are the miners?
Miners are those who are dedicated to providing computing power to the network to carry out, in this way, the verification of transactions. Their job consists of validating and grouping the transactions, made by users within the network, in blocks that will later be linked to the Blockchain.
What are the nodes?
Nodes are all the computers connected to the network that, through a certain software, store and distribute a copy, which is updated in real time, of the block chain. Thanks to this, a distributed database is generated; therefore, it is practically impossible to alter a registry without it being detected immediately.
Different types of blockchain
There are different types of blockchain, either public or private. At this point, we will focus on explaining public blockchains. Some of the best known are Ethereum and RSK. The main difference between the two is that Ethereum was developed with the purpose of simplifying the process of creating decentralized applications (dApps) on a blockchain. It has its own cryptocurrency (ether).
RSK, instead, was created to run the same job as Ethereum, but is used as the cryptocurrency Bitcoin. On their own website they affirm it is the safest platform in the world and that it is a sidechain, that is, a chain/side network on the Bitcoin blockchain.
What is a smart contract?
A smart contract is a computer program that is developed in several programming languages; the best known is Solidity (very similar to JavaScript). It is responsible for facilitating, securing, enforcing and executing registered agreements between 2 or more parties (persons or organizations). The contract would be the intermediary that establishes a good negotiation between the parties involved, to enforce what was previously stipulated in the contract.
Some examples of smart contract
There are many possibilities, here we mention:
- Integration of payments in a marketplace to ensure that one of the parties involved sends the money and the other party receives it after having completed their service in a dApp.
- Copyright management, for example: signature of documents, to confirm that they are not corrupted.
- Active cryptocurrency exchange on a Peer-to-Peer (P2P) exchange network.
Blockchain is a technology that is here to stay and is creating strong roots in many different fields, not just crypto. It has applications in industry, banking, food, health, etc. In sum, for any process or transaction where multiple parties are involved and greater security and transparency are desired, blockchain is a possible answer.
