What is this Blockchain currently making buzz in the world? What does it involve? Why everyone speaks? Is my investment worth? Probably, these are among the plethora of questions you've asked yourself and perhaps you have not found enough information to answer all your questions. Do not worry; I got you.
I will use Bitcoin, one of the most common cryptocurrencies and I will report it to Blockchain, the technology that supports it to explain how Blockchains works and how its technology is destined to change the world.
Bitcoins are simply a digital currency that runs on a blockchain, and were first invented in 2009 by a person or group of people whose identity remains a mystery. They (the speculation) were commonly called Satoshi Nakamoto.
Apparently no one knows their true identity yet and in 2009 they clearly exposed their visions in a white paper in which they tried to see Bitcoins become one of the best peer-to-peer electronic money systems.
Bitcoin (BTC) Blockchain
The Blockchain technology behind Bitcoins is currently a public ledger that records every transaction that takes place between two or more people. His supporters argued that when every transaction was recorded promptly, it would be safer and would not be compromised like some of the current payment systems.
The first Bitcoin transaction dates back to 2010 by a well-known programmer, Laszlo Hanyez, who grossed almost 10,000 Bitcoins in two pizzerias owned by Pope Giovanni. After this, the use of Bitcoin has advanced and people have started using it for different purposes including the purchase of illegal material such as drugs and weapons.
How Bitcoin's Blockcoin works
Unlike most of the common currencies that are centralized, Bitcoins are the exact opposite. They are not governed by any central authority, which means that traditional financial institutions such as banks do not have control over them. Instead, they are maintained and controlled by a network of trained professionals referred to as miners.
Also known as nodes, these miners carry out their operations on high-tech computers and each of them competes against each other to solve complex calculations on the sites for each transaction to succeed.
Each transaction comes from an e-wallet that has a sort of private key. This' private key & # 39; it is more a digital signature that provides proof (mathematically) that the original owner of the e-wallet has recognized the transactions.
Let's say there are millions of bitcoin transactions taking place in the world, each of them organized in a block that is governed by first level cryptographic rules and regulations.
These blocks are then referred to professionals with high-powered machines that use them to further validate transactions by solving complex mathematical calculations. Emerging winners are paid in the form of Bitcoin. It's that simple.
Are there any other types of blockchain?
Here are some good news; more companies are investing in Blockchain technology to assist businesses and individuals who have the same interest in them. Examples of such companies include Ripple, IBM, Hyperledger and Ethereum.
Speaking of Ripple, it was designed specifically for regional and international transactions. It often involves transactions between large companies or investment companies that like to reduce the costs of cross-border transactions or that demand their funds faster. The cryptocurrency related to it is known as XRP and, although it has been developed, it is not yet essential to feed its products.
On the other hand, Ethereum has a digital currency known as Esther and is currently the main cryptocurrency after Bitcoin. It became public as Bitcoin and now allows several customers to develop decentralized applications on their platform, just like other reputable companies like Apple and Microsoft.
Is the future bright or weak for Blockchain?
We can not deny that Blockchain technology could be the next big thing in the world and could change the way in which transactions are handled. It is destined to dominate in most government agencies, insurance companies or even in the health sectors.
Although promising, it is a pity that it has numerous obstacles that are still dragging its development. This is why it tends to be prevalent in smaller processes such as the issuance of loans, that is, in the case of BBVA and other financial institutions that have recognized the technology.
Furthermore, it is still uncertain if the Blockchains technology will have the capacity to handle huge financial transactions and this is what now worries most companies and investors.
Garrick Hileman, CEO of Mosaic.io, has dispelled his fears when he said that the technology on which the Blockchain banks will be based has not been fully explored and still needs more time. "This is still confusing and we have to debate about it," says Hileman.
Moreover, with more companies investing in Blockchains, there is still the doubt that all these companies will present a new digital currency that will make them compatible with each other. This current situation in the Blockchain technology can be compared to the gold days when cell phones were first introduced.
In those times, there were numerous systems including Blackberry (the most profitable system at that time), Android and iOS, among others. Turned tables; iOS and Android are survivors and up-to-date, they are the ones that are currently dominating the entire market.
We all know that Blockchains is a hot topic, disruptive and accelerating at the moment. Things could improve when both private and public companies work together to make this technology widely accepted.
This will only be possible if they will fill the gap that still exists. Even if it is still being tested, we can not wait to see it change the world and make it a better place. I think the rules are bound to change soon, right?
The opinions in this article are those of the author, they have nothing to do with the Journal of today.