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Characteristics and practical application of Blockchain

The other day, in one of those playful messages from social networks, I found with a story that made me remember the concept of Blockchain. It is not that it was something very representative, but it had to do. The story said something like the following:

Some students, who had not studied for an exam, decided to find a trick to get give pain to the teacher and have a few more days of margin for studying and go well prepared. Therefore the day of the test (a Monday, for details) are Haggard and altered before the teacher, explaining that returning from a wedding the day before, they had an accident with the car. Thank God they escape unscathed, but spent the night in the hospital joining some friends that if they were injured. 

Professor pity them and, seeing his State of shock, told them it would make them review after a few days, when they were more calm and concentrated. 

The day of the exam, with high morale, after hours and hours of study, they are presented to the teacher and this placed them in separate classrooms to examine them. The test consisted of the following questions:

-Who married?

-At what time was the accident?

-How many cars were involved?

-Brand and model of car that you were?

-Name of the injured friends?

Note: If you reply all equal to these questions you will have an outstanding

The teacher did not need to rely on a trusted third party to verify the history that had him (Civil Guard, emergency services, hospitals etc). It only validated history of distributed form. If we all had the same story, gave evidence and provided the same level of detail, they would be telling the truth.

This is one of the characteristics of Blockchain, remove to a trusted third party who bears witness about a concrete fact. The idea is based on a validation distributed by a group of people (nodes). That all confirm that this data is correct.

 

Features of Blockchain

Obviously Blockchain is something much more complex than this and it has many aspects, but we could summarblockchainize their features in the following list:

  • Distributed: the information collected is distributed many computers (nodes). There is an entity, organization or central system that has all the information. This is distributed in copies updated in real-time between all nodes. All nodes have the same value and the same importance in the network.
  • Consensus: when an operation is performed, this is validated through a consensus Protocol. Until an operation to register and distributed among the nodes, must validate that it is correct by means of a network of global confidence.
  • Miners: they are nodes that provide the network computing capacity to validate operations and point them in the ledger. Once the transaction is validated, it is when you first start to replicate to all nodes.
  • Ledger (or ledger in English): is the equivalent to the term chain of blocks, is to go with each operation as a block one after the other. It's like a point in the accounting ledger. Once noted, can only sign a following operation, but you can not go back.
  • Immutability: the writing of a block cannot be altered. Any invalid modification, would not be accepted by the rest of the nodes and would be identified as such.
  • Cryptography: is one of the main elements of Blockchain, is how to ensure that blocks can not be manipulated without that is detected. It basically focuses on the generation of a hash code that identifies the block information.

All these elements combined, create an environment that is very difficult to hack, since an alleged attack should modify and update all the distributed database. It does not only with hack a few, since the rest would detect immediately that these were manipulated.

Bitcoin

So far, you may have noticed that I have not appointed yet currency BitCoin. Everyone has heard of it. Perhaps less of Etherium, competing currency. Blockchain is the technology that supports these coins and even though they are closely related, should make it clear that Blockchain is not the same as BitCoin.

BitCoin model was the first to apply this technology, but it is clear that the application of Blockchain opens the door to the transformation of many sectors. Just remember the criticism to this virtual currency, without a Central Bank that support it. Little by little a hole has been doing and it can now be used as currency in many places.

Practical applications of Blockchain

It is clear that Blockchain is revolutionizing business models. Many sectors are seeing how to apply it in such a way that accelerate and facilitate their efforts and especially to be a tool in the fight against fraud.

One of the elements that make it much easier this task are the Smart Contract (or smart contracts). Based on Blockchain, are contracts with the following characteristics:

  • It does not require intermediaries to validate it or ensure compliance.
  • They are not interpretable, by which avoid any of the signatories do not fulfill their part of the agreement on the basis of a subjective interpretation.
  • It meets itself and runs when the agreed conditions are met.
  • You can be signed by persons (natural or legal) or by autonomous machines.
  • and has all the characteristics inherent in Blockchain: public, decentralized, transparent and immutable.

Don't need nobody to manage them. You must not pass them through the signature of a notary or a Registrar. They are accessible to all at low cost.

 

Originally posted here

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