Blockchain technology, how it works and what it is for

Much is talked about Bitcoin and its blockchain technology as it is known in the world. But what is blockchain? How does it work?   

To explain it in a simple way it can be said that the blockchain is like an accounting book in which all transactions related to Bitcoin are recorded or settled. This book has a certain number of pages and each page can record a certain number of operations.   

Now, each folio represents a block and all the blocks in that book make up a chain. In the book of accounting the folios are listed in ascending form and each of the registered operations have a reference. This set of references links all the operations and consequently all the folios of the book.   

Another analogy that the blockchain has with respect to an accounting book is that once the transactions are registered they can not be modified, since upon suffering any modification it would cause the accounting records do not balance and consequently a reliable financial statement could not be presented.   

So far we have seen all the similarity that the blockchain has with an accounting book, but there is only one big difference. The accounting book is private information of the companies and depends on a trusted third party to verify the veracity of the information recorded there. That trusted third party can be an auditor, institutions of fiscal controls among others.  

The blockchain has the characteristic of being public, it is indeed a great accounting book, but, this book is replicated throughout the network through teams that are called miners. Each miner contains an exact copy of the entire blockchain and every time a transaction is added a new version of the chain is immediately generated, which replaces the previous one and is immediately replicated in the network accessible to all miners.   

To give greater security to the chain of blocks each set of operations or block is encrypted in a hash. A hash is a logarithm that converts information into a single 64-character element.

What is the use of blockchain technology?   

While it is true that blockchain technology is used mainly for operations with Bitcoin, it is also true that this technology could be used beyond the cryptocurrency to be used in everyday life, significantly reducing bureaucratic procedures.   

Suppose you want to buy a house. Well the first thing is to agree the price with the seller, once you have covered this step you will have to write a document in which, you and the seller agree with both the purchased good (home) and the price (money), but, In order for this transaction to be valid, it must be presented before an entity that certifies that the transaction is in fact being made.   

Note that the operation not only involves the buyer and the seller, but also involves a public official, call this notary or registrar.   

The blockchain technology, omits the presence of the notary or registrar, because only generate a contract in which the seller transfers the property and you funds, this transaction would be recorded in a block that would immediately be replicated in the network and both the buyer As the seller they are sure that the information that lies there can not be altered.   

How do you like this innovative way of doing and registering operations?  

If you liked this post, please leave me your vote. This would help me a lot so I can continue doing research to talk about topics like this. Thank you