A blockchain is a record of the truth that creates trust between multiple parties. More specifically, it is a secure and inviolable register with time-stamped transactions, distributed among a certain number of entities.
This means that a blockchain can replace an intermediary in situations where a trusted third party is needed. So, for example, when we need a bank (or more) to make a payment in a foreign country, software – the program that executes bitcoin can also send money to someone in the whole world for us.
It’s a method that turns out to be much cheaper and faster and, in the case of cryptocurrency, transparent so you can see when the money arrives, while with a bank transfer you have to request it from of the recipient. Overall and from this point of view, the Blockchain facts promise greater security and lower costs than traditional databases.
Why is blockchain important?
The main difference between a database and a blockchain is that a database is managed and controlled by someone. A blockchain does not need to be managed by someone, so you do not need to trust someone to manage the platform. It is managed by everyone at the same time. C ‘is a change in economic model.
How does blockchain work?
Not all blockchains work the same. For example, they may differ in their consensus mechanisms, which emerge as the rules by which technology will update the general ledger. But basically, a blockchain is a ledger on which new transactions are recorded in blocks, each block being identified by a cryptographic signature of this data.
The same signature will always result from this data, but it is impossible to recreate the data from this signature. Likewise, if even the smallest detail of this transaction data is changed, this will create a very different signature, and since the signature of each block is included as a data point in the next block, the following blocks will also end up with different hashes. This is what makes the registry inviolable.