What is blockchain technology?

Blockchain is a technology that allows the reliable and secure realization of any type of transaction between two or more people without the need of intermediaries, through the Internet. His introduction to the world was through Bitcoin cryptocurrency, the first blockchain platform. Originally, Bitcoin was created as an electronic payment system between peers (A Peer-to-Peer Electronic Cash System), for what is known as "digital money".

Blockchain is an articulation of structured technologies in a naturally encrypted system, which provides the users involved with protection of their identities and the data of their transactions.

A common blockchain transaction begins with sending a digital asset from one digital wallet to another. This transaction is listened to by several nodes (depending on its latency with respect to the issuing portfolio) and grouped with other transactions that said nodes have listened to. This group of transactions is then sent to the miners as a work to be solved. The miners take the work, which may be different for each group of miners depending on the node that has proposed the work, and compete with each other to get a value that solves a mathematical puzzle that authorizes the miner who finds him to propose his block, with the transactions in it, to be added to the chain. The proposed block, in addition to containing the transactions, also contains the identification of the previous block and a coin emission value by the network (the reward), which are routed to the winning miner's portfolio.

All this process, which is known as mining. For users, the only thing visible is the number of confirmations that their transactions receive and the time they take to complete them.

The blockchain technology guarantees that the records of the transactions made are valid and unalterable. We can see each block as each of the pages of the same book practically infinite, only that here what has been written can not be erased or repeated: each transaction or data is protected with a unique fingerprint. This is known as immutability.

Types of blockchain

Although in principle the blockchain was created to be a great public accounting book and accessible to anyone, the development of this technology by different entities and companies around the world has given it a private nuance that has essentially divided it into two categories and four types

Based on access to stored data, we can find it public or private. In the first, there is no restriction for the reading of data or the performance of operations by users; On the other hand, in the second, both the reading and the operations are limited to specific participants.

On the other hand, based on the capacity to generate blocks, it is divided into those without permits (permisionless) and with permits (permissioned). In the first there are no restrictions to be able to carry out transactions and create new blocks, so that coins or digital assets native to the network are offered as a reward to users who want to maintain the network. It's decentralization, such as Bitcoin. The latter are developed by generally private entities, in many cases for internal use, and the users of these need permissions by network administrators to interact with the protocol. This is the type of blockchain that banks are testing: they are centralized, that is, controlled by the entity and not by the users.

Applications

Being this a young technology, surely all its possible applications have not yet been discovered or developed enough. However, there are a number of uses that are quite recurrent.

- Cryptocurrencies: its main function in this field is, essentially, to transfer value, avoiding that a unit of digital currency or cryptocurrency can be spent twice, since it records each transaction only once and unalterably. Many cryptocurrencies have developed their own blockchain, such as SolarCoin and Zcash, but others prefer to rely on the mature Bitcoin structure and are built on their platform, just like Counterparty's digital assets.

- Transactions and payment systems: intrinsic qualities of the blockchain are speed, security and privacy that allows users when making transactions. Therefore, many companies, mostly banks and financial institutions, have taken the DLT to build their own platforms that allow, for example, speed up and reduce the costs of international and inter-bank payments.

- Registration of documents: the blockchain is a large register that many parties can access from anywhere in the world. And it not only records assets, but virtually anything. For this reason, it is already being used to register and verify the authenticity of all kinds of documents, from university degrees and marriage certificates to medical records, an area that has certainly had a lot of attention, since it would allow hospitals, insurers and lenders to be merged into a single platform, which would exponentially accelerate the sanitary process. A whole conference on the blockchain in health was already carried out, while the Stampery platform already allows this type of registration.

- Supply chain: knowing exactly where things come from is always a problem, but the blockchain is able to solve it. With this technology it is possible to mark almost any object with a unique fingerprint that will follow its entire life cycle from the beginning. Thanks to this quality, it is perfect for use in the complex supply chain, something proven by Provenance when implementing this structure to avoid illegal fishing, or Walmart, which is in tests to ensure the safety of food. In the same line is also the giant IBM, which is working to solve the problem of the last mile.

- Smart contracts and decentralized applications (Dapps): the blockchain is also capable of creating the adequate infrastructure to create intelligent contracts, that is, automated digital agreements in which the need to trust third parties for compliance is once again eliminated. The terms are established in principle at the convenience of the parties, and later are fulfilled thanks to the code, as a scheduled task. In turn, these open an almost infinite range of possibilities that can be translated into decentralized applications: computer functions of all kinds that are not controlled by a single part, but distributed over the blockchain. The most famous example of this is, undoubtedly, the decentralized platform Ethereum.

- Entertainment: several videogames and games of chance have been built on a chain of blocks or based on a digital asset of their own. Speed, transparency and, above all, rewards, are assured. In this area we have Spell of Genesis, a card game, Takara, an augmented reality application, and vDice, a decentralized betting platform.

On the other hand, there are also social networks that offer micropayments in cryptocurrencies to their users in exchange for the content they provide and that is stored transparently, unalterably and publicly in a blockchain. Such is the case with Steemit.

- Trade: transparency and security are certainties of the code, so its use in commerce was inevitable. Electronic buying and selling platforms such as OpenBazaar and LBRY have been built on their own block chains; where the latter even allows authors to put the price they want to their creative work and collect all the profits, without intermediaries.