You probably read this term or heard it somewhere many times and don’t know what it means, but you did not take the time to find out what it is or ask about it, from now on I tell you that you should not miss this “new” technology or the terms around it. If you ever laughed because your grandparents or your parents found it difficult to understand and manage the internet and its tools, the same could happen to you with the blockchain, Web3 and cryptocurrencies, because the new digital era is here, but don’t worry, We’re still early, so let’s see what it’s all about.

What is Blockchain?

Let’s not get complicated, Blockchain is a set of technologies that allows the transfer of data safely thanks to a very sophisticated coding, it also proposes to revolutionize, among other things, the economy as we know it, because by adding Smart Contracts as a fundamental piece, companies can adopt this technology.

It is often compared to a company ledger where all money inflows and outflows are recorded. But, in this case, it is a book of digital events. This transfer does not require an intermediary to verify and approve the information, once the information is entered it cannot be deleted, only new records can be added.

Basically, the blockchain eliminates intermediaries, decentralizing all management. The control of the process belongs to the users and they are the ones who become part of a huge bank with thousands, millions of nodes, each of which becomes a participant and manager of the bank’s account books.

How does the blockchain work?

For banks, auditors, notary or Paypal a third party is necessary so both parties trusted to guarantee the authenticity of a transaction, and that had a record or seal of truth. With the blockchain, this problem and double spending disappears by combining the P2P technology with virtual currency and thus creating a new form of digital communication.

Transactions are made from so-called “wallets” or electronic wallets. Wallets are encrypted files that work in a similar way to a bank account, they have two keys: public (address) and private.

The public address is an alphanumeric combination between 26 and 35 characters, for example the address of a cryptocurrency like bitcoin, which acts as an account number. In this way, in order for someone to send you cryptocurrencies, you must previously give them your public key (address) in order to later receive the virtual currencies. Meanwhile, the private key is used to authorize operations from your wallet.

Encrypted Transactions

Thanks to the use of the blockchain, the irreversibility of the transactions is achieved, which allows nobody to commit fraud to benefit, since it does not allow the account book to be modified to divert the cryptocurrencies from one place to another without others finding out.

This account book is safe because the linked blocks have a “hash” (encrypted) where all the information appears. Which means that although it protects the privacy of its users, it does allow control of the traceability of those transactions.

What is the future of the blockchain?

Experts on the subject compare the ‘boom’ of the blockchain with milestones such as the development of the Internet or the integration of computers in domestic use. In other words, they point out that it is a system that will change the way of understanding business and society.

Likewise, they reveal that one of their maximum potentials will be the Smart Contact (intelligent contracts). In other words, with blockchain technology, agreements and transactions can be made in a confident manner without revealing confidential information between the two parties. For example: sale of products, house rental, cars, etc; all online.

On the other hand, blockchain will be essential for the Internet of things. Our electronic devices will be able to communicate with each other in a secure and transparent way, experts point out. These smart devices will be able to buy products on the Internet automatically.