How Blockchain Works?

How Blockchain Works?

A blockchain (meaning "blockchain") is a special type of database, such as a digital accounting book although this simple explanation does not describe the geni

What is blockchain?

A blockchain (meaning "blockchain") is a special type of database, such as a digital accounting book although this simple explanation does not describe the genius behind how this technology records values ​​and transactions.

Until recently, people had to rely on third parties (such as banks, governments and companies) to store their valuable assets, and their transaction information.

For example, when you make a purchase with your credit card, you trust that the credit card company and your bank will keep your personal information and your transaction details safe.

This trust towards institutions does not only apply to financial transactions: A car rental service also maintains a central database with your personal details, your address, the vehicles you have rented, and when you need to return them.

You trust that they will keep all this information private and secure. The information was always kept centralized in these establishments, and each of them had to maintain their own records and systems. But not anymore!

How Blockchain Works?

The blockchain is able to record all the transactions of the participants in the blockchain network. He stores and shares them publicly.

When people who want to make an online transaction are asked, what matters most to them in that movement, most stress security and transparency. And this is the main attraction that Blockchain has: the security and trust it generates.

The blockchain consists of strong cryptography. It is an extremely intelligent software that protects documents and data ensuring that they cannot be hacked. This technology means being able to make a transfer abroad in a matter of seconds and without any associated commission. In this way, banks and stock markets are the most affected by this new transaction system. The elimination of intermediaries means that banks have to put the batteries. For example, in our country, specifically in Galicia, they already have their first bitcoin cashier . But Blockchain doesn't just affect the banking landscape. It could change the way it works, is regulated and operated on the Internet. Other alternatives have recently emerged. These New protocols built on the basis of such technology give rise to services and products that provide an amount of information stored in a database that cannot be altered, nor is it owned by a single entity.

A Blockchain technology with these characteristics could be the future of electronic voting, for example. Since, due to the nature of its operation, it could guarantee a system in which identities and voting would be protected at a very low cost and would be in falsifiable.

An example will serve to understand its operation and the steps that occur to perform these transactions. But there is the premise that blockchain must have several users so that they will validate the transactions and will be recorded in that book to which the authors refer.

1. Someone wants to send money, ship a product, or sign a contract.

2. A notification of the action is sent to all users who are within the network (which could be global).

3. If the transaction is valid, everyone approves it.

4. After approval, the record is updated (that is, a block is added to blockchain ).

5. The action occurs, and, if it is a payment, the money changes hands.

6. An unmodifiable record closes the transaction.

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