What is Blockchain and what is this technology for?

One of the most innovative technologies that has been developed in recent years is blockchain, not only because of its versatility, but also because of the security and trust it offers. In connection with handling large amounts of data, it has changed the way we carry out transactions, enter into contracts and buy art. Understanding what blockchain is and what it is used for will contribute to a better understanding of the future security.

The term blockchain is literal. In the chain, each block is full of data, in other words the information is recorded and grouped into blocks and each block acts as a link.

What is blockchain?

In reality it is a huge database that collects and stores information in a shared and decentralized manner. This creates a record that is uniquebut it also generates synchronized copies, making it impossible to manipulate the data.

The idea of ​​the chain is related to the reliability that this technology provides, like the blocks store information in a linear fashion and cannot be deleted or manipulated, because each of them is connected to the previous one and it is not possible to break the chain, thanks to the use of cryptography. This quality sums up the great innovation it brings in terms of the reliability of the data it provides.

All types of digital transactions can be registered in this large database, from the sale of a property or the signing of a contract between companies to a patent, the acquisition of a digital artwork or an NFT, depending on whether they are tangible or intangible assets.

The above is recorded in what is known as a distributed ledger. These large databases are accessed by a certain number of authorized persons for each network of blocks, who are responsible for entering the data into the latter. In addition, the work is carried out in several nodes, which means that the information is always available, thanks to the ability of these points to decentralize and redistribute the data when necessary. This guarantees the security, availability and transparency of each record.

What is blockchain for?

The digital transformation has made data the essential raw material for companies. And blockchain technology guarantees fast and efficient transfer of information, with the certainty that it cannot be tampered with or deleted, like a digital signature.

Its ability to immutably record all types of digital transactions facilitates authentication, tracking and traceability of such transactions and assets recorded using this technology. The creation of these digital fingerprints has seen their use expand rapidly from the world of finance to a wide range of other sectors, including distribution, logistics, healthcare and manufacturing.

Companies, regardless of size, can also use it as a service, blockchain-as-a-service, to ensure that the information they work with is truthful and to constantly identify the process that this information has undergone (who generated it, and where and when). In this way, the various methodologies can be improved and the protocols can be made more efficient.

It makes data exchange more reliable, which helps build trust among end users and prevents problems such as data duplication and fraudulent use of the data. In addition, the fact that the information is always available at any time makes any process more efficient. The above is reflected in cost reductions for companies and public administrations.

As it ensures that each note is unique, blockchain technology has been a powerful driver for, for example, the development of NFTs, and it has been the solution in cases of theft and fraud, because it removes the possibility of duplicating these assets and it helps to find the stolen one. Another area where this technology is becoming increasingly useful is smart contracts, which are executed directly, without the need for intermediaries and without the possibility of any of their requirements being changed, as well as the storage of medical records and the traceability of medicines.

The momentum given by cryptography to blockchain

To understand what blockchain is, we must refer to cryptography because without the development of cryptography, blockchain technology would not be what it is today, nor would it have the applications it has. Why? Because of the properties offered by this mathematical discipline in terms of protecting information and communication.

There are different types of cryptography, and these has the task of linking the blocks to each other and protecting the contents. Thanks to the use of a set of algorithms, cryptographic keys can be generated, information can be hidden from the eyes of those who shouldn’t see it and communications can be protected to ensure that only the people involved in the blockchain can access them.