Where Does Blockchain Come From? What Is It Used For?
Blockchain: The concept emerged associated with Bitcoin and is also used in other cryptocurrencies; However, it is not the purpose of this article to delve into the cryptocurrency mining process; it is necessary to take a straightforward approach.
In a very superficial way, mining is the process of validating a new block. Remember the hash? In terms of bitcoin, when a virtual currency transaction takes place, a valid and unique key needs to be created. This is done through complex mathematical equations, which are solved by computers continually trying to get the results of such equations, that is, mining.
The first computer that generates the correct result, producing the unique key (hash) for each transaction carried out and whose information will be stored in a block, receives a small, determined amount of bitcoin.
In addition, the solution is communicated to all other computers that make up the system, which verify that the answer is valid. This is how a new block is created and added to the chain. When this happens, all the computers that integrate the network start to have the information of this transaction.
More than that, when the new block integrates the chain, as it starts to contain transaction data from all previous blocks, as the chain grows, the first blocks have more and more blocks attesting to their integrity.
So, in our hypothetical example, the first block was validated by the second, third, and fourth blocks. The second was only for the third and fourth blocks, and the third was for the fourth. Therefore, the older the league, the more validations it has undergone and the safer.
What Are The Advantages Of Blockchain?
If it hasn’t been evident yet, the most outstanding merit of this technology is security. Unlike centralized systems, in which if an attacker gains access to the central agent, he can defraud or corrupt the information in his favor, in the blockchain model, for example, if he tries to create a tampered block, none of the other nodes on the network will “approve” the inclusion of this block, as it has not been adequately audited according to the rules for its inclusion.
More than that, as the hash of each block is dependent on the others in the chain, changing a hash of a rigged block interferes with the soup of other unions in the chain, and this will appear for all nodes or elements that keep complete records of all the transactions. These nodes are called Full Nodes.
The only possibility of compromising the system is to gain control or invade more than 50% of all computers that integrate the network since the audit and confirmation of the validity of a block is given by an absolute majority, that is, 50% of the members, plus one, need to validate each transaction for it to become part of the chain.
However, there are thousands of computers geographically distributed worldwide from different people/organizations, which makes this unlikely. Furthermore, new computers are added every day, and thus the network becomes more and more secure, as there are more control and validation points.
On the other hand, it should also be apparent that, just as a large number of distributed network agents with equivalent control and validation performance is a foundation of its security, it automatically prevents its application in smaller systems, making the cost prohibitive.
Blockchain is a technology born linked to the creation and control mechanism of the bitcoin cryptocurrency, whose role is to be a method to audit and certify the security of transactions involving the virtual currency. Its structure uses a new paradigm to exercise such control in a much superior way in terms of safety and, at the same time, more transparent for the control and validation agents that integrate it.
Also Read: Blockchain In Practice – Hype Or Disruption?