Blockchain. What is it and how might it affect us?

The concept of blockchain began to grow and take hold in the last decade after numerous years of research in the field of cryptography—the discipline that protects documents and data. The aim of the people who began developing blockchain was to establish mechanisms to ensure the security of transactions through digital means without having to rely on notaries or intermediaries. Blockchain allows for distributed, non-centralised validation of transactions through the entire network without having to rely individually on each node in the network. One of the first applications was cryptocurrencies, specifically Bitcoin. This creation by Satoshi Nakamoto was the first blockchain to gain the public's attention.

To summarise quickly, blockchain is a distributed database where events or transactions are recorded securely and confidentially. Using cryptographic techniques, it ensures that the content of each transaction is private while its results are public and unique. For example, the identity of the parties involved in a Bitcoin transaction is private, but the financial flow is explicit, preventing the same Bitcoins from being spent more than once. Transactions are validated by the network nodes themselves. The distributed database is stored publicly as a "blockchain of transactions" in all nodes in the network, with no intermediaries, and its contents are immutable and cannot be modified by anyone thanks to complex cryptographic mechanisms.

What are the main benefits of blockchain?

• Cost and time savings: considerably reduces the tasks of recording and controlling data in transactions. The blockchain avoids duplicate entries, meaning only one entry is recorded regardless of the number of parties involved.

• Security: transactions cannot be modified or deleted once they have been validated; it is only possible to add new transactions at the end of the chain. That means that once the transaction has been made, the system cannot be manipulated dishonestly.

• Transparent: it contains a record or "ledger" where the different transactions completed are stored. It is only available for consultation; the transactions cannot be modified. This guarantees the accuracy of information and completely eliminates the possibility of an underground market.

• Confidence: confidence is based on cryptography and the system's design, no supervisory entity is needed. This allows blockchain to ensure confidence in a "hostile" environment where dishonest actors may be operating, without relying on a government or a company, such as banks or central banks.

• Real-time transactions: its immediacy minimises the counter-party risk found in other transactions, where the payment commitment takes several days to be executed (avoiding risks of non-payment, bankruptcy proceedings, fraud, etc. during the payment process).

• Immutability: the data included in a block cannot be altered. Any invalid modification would not be accepted by the rest of the nodes and would be identified as such.

• Consensual: when an operation is performed, it is validated by a consensus protocol. Before a transaction is recorded and distributed among the nodes, it must be validated as correct by a trusted worldwide network.

• Distributed: the information collected is distributed on many computers (nodes). There is no central entity, organisation or system that has all the information. It is distributed among all nodes in copies that are updated in real time. All nodes have the same value and importance in the network.

What are the potential uses of Blockchain?

• Payment source: one of the main uses. This involves cryptocurrencies, the first and best known of which is Bitcoin.
• Identity management: the encrypted and stratified nature of the technology makes it an easy and secure way to manage digital identities.
• Inter-company: speeds up and facilitates inter-company communication, as it allows for instant settlements with immutable documentation.
• Digital rights management: allows users to manage digital assets. Furthermore, Smart contracts, the virtual contracts used in this technology, calculate transaction rights while distributing this information securely, immutably and visibly.
• Property management: allows the origin of property to be verified. Digital tokens eliminate the potential for corruption in transactions.
• Medical or educational history: Blockchain would allow a person tor safely share their medical record or educational background without of fear of tampering.

In conclusion, we can say that this technology will have a direct and growing effect on our lives. Any field that requires parties to consult centralised information before performing transactions can be an area of application.

Many sectors can be affected, namely the financial and property sectors and even voting systems. In short, this technology will remodel the current perception of money and exchanges.