Although this concept may seem somewhat nebulous to some, it is nonetheless a term among the most popular in recent years with the advent of cryptocurrencies. This decentralized ecosystem allows for the storage and transmission of information, while ensuring the transparency and integrity of the network.
However, this term “blockchain” is very often considered a misunderstood umbrella term. So what is it really and what are its possible applications?
What does blockchain terminology mean?
Blockchain can be defined as “the” technology that keeps track of a set of transactions, in a decentralized, secure and transparent way, in the form of a block chain.
Giving a more graphic definition, mathematician Jean-Paul Delahaye believes that blockchain is ” a very large notebook, which everyone can read freely and for free, on which everyone can write, but which is impossible to erase and indestructible “. By extension, it should also be understood that each page of this book is a block, all linked together.
How does it work?
Rather than having a centralized ledger by one entity, person, state, blockchain is a collection of decentralized ledgers. Anyone can then be an actor in this network by writing to one of the nodes.
Technically, the blockchain uses a mathematical algorithm which is the Proof-of-Work (PoW). It is this algorithm that will allow you to select the legitimate registry and validate the block. As such, the operation is performed in two stages on the blockchain:
- Locks are the first “validation pending” : New incoming information is stored. They are checked to ensure that there are no contradictions with information already existing on the network.
- The blocks are “validated” : the information is encrypted. The modification becomes impossible, which prevents the manipulation of transactions. The integration, in fact, is chronological, indelible and tamper-proof.
What is this technology for?
While blockchain technology was originally developed to support transactions made via cryptocurrencies / cryptocurrencies, blockchain is a great innovation that can be applied in many fields.
Here are some of the fields of use of the blockchain:
- In the economy, with major central banks intent on using blockchain to develop their own digital currency. We are talking here about CBDC (Central Bank Digital Currencies).
- In the field of logisticsfacilitates the traceability of products and food, while reducing formalities.
- For real estate divide ownership into digital shares to facilitate and secure transactions.
- In politics with the implementation of electronic votes guaranteed by the blockchain.
- In legal mattersto authenticate and guarantee certain acts such as wills.
- On the insurance sidethe blockchain promotes the automation of reimbursement procedures and the reduction of some formalities for companies and their customers.
- For the banking sectortechnology allows to speed up the processing of operations as well as their certifications.
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The common denominator of all these possible applications is to avoid fraud and ensure transparency.
What are the advantages of the blockchain?
The use of the blockchain has several advantages:
- System security thanks to the validation of the blocks carried out by a group of users all over the world.
- Very low transaction or management costs since the organization of exchanges on the blockchain takes place exclusively through an IT protocol.
- Validating a block takes only seconds or even minutes. Enough to ensure the speed of transactions on the blockchain.
Conclusion: the heart of the crypto ecosystem
You would have understood, the blockchain is a revolution whose field of application is potentially infinite. Its use will regulate a multitude of aspects of our daily life in the future. Blockchain has proven to be a reliable infrastructure with cryptocurrencies.
Ultimately, as cryptocurrency fans remember “Code is law”. The only rule is the code itself. Computer code that does not discriminate between individuals and works fairly for everyone.