The meaning of blockchain is “chain of blocks”. You may already have heard of this word, but it’s only a matter of time before its popularity spreads even further. Since your technology is already a reality and will change the way we see the digital world.
This is a paradigm shift, which is used as the method of encoding the information behind the virtual currency. This information defines the virtual currency or crypto currency and maintains its entire structure.
What is blockchain?
Blockchain or chain of blocks is the technology of bitcoin or any other crypto currency. It has the application capability to support applications in other areas beyond financial transactions. For example, use of the Internet or public administration.
Blockchain is the technology that favors the transfer of digital information with an improved coding and in a completely safe way. This transfer will not require a centralised mediator to recognise and affirm the information, but is spread over a number of nodes.
This decentralization of information offers a high degree of certainty that protects it from the increasingly usual hackers. In addition we also have another great advantage: in case the network falls, it would be enough that only one of those nodes does not do it so that the information or the operation is never lost.
How blockchain works
The blockchain, as its name reveals, is a chain of blocks. Each and every one of these blocks has the coded information of a transaction in the network. Each of the blocks in the chain provides a package of transactions and two codes. One that indicates which block precedes it (excepting the origin block, of course), and another for the block that follows it. In other words, they are intertwined by what are called hash codes or hash pointers.
At this point, the concept of mining carried out by the nodes comes into play, i.e. the development of information validation. During this mentioned verification or “mined” development, at the moment when there are two blocks pointing to the same previous block, the first one that is decrypted by almost all the nodes will simply win.
In other words, most points in the system have to agree to approve the information. Because of this, although blockchain forms multiple chains of blocks, the longest chain of blocks will always be legitimized.
This is a scheme that will change the way we understand business and society. One of its best potentials is also in the so-called smart contracts. In other words, with the new blockchain technology, arrangements and transactions can be made confidently without exposing confidential information between the two parties and without the need for “arbitrators”, such as payments to distributors or, for example, the rental of a car online. Our electronic devices will be able to communicate with each other in a reliable and transparent way.