Blockchain Technology for Dummies
Blockchain technology is one of the modern terms in the field of finance; it is a tool which seems to be the engine of the fourth industrial revolution of humanity. A resource that will undoubtedly mark a before and after in the way both society and industry carry out daily activities.
The blockchain is a database which stores and distributes records equally in nodes that form a network, without central nodes to control others or that possess information different from the rest.
This distribution scheme is one of its primary benefits: it is practically impossible to hack because to cause real damage it is not enough to attack one or two nodes of the network but to attack all the system.
Blockchain cryptography ensures those records are encrypted, and only private-key holders can access them not to modify them, but to prove that they own the data. This makes the registration process completely safe and impossible to change the information once pointed in the database.
The main innovation of blockchain technology -and what puts it as the most important invention of the 21st century- is that it can transmit a digital file between the nodes of its network without having to duplicate it. When you make a bank transfer, the digital data (the transfer itself) is doubled in your account and the other. When you give cash to another person that money is not doubled, which means that using blockchain is very much like paying things in cash.
The economic and financial sector was the first in which the blockchain technology showed its many advantages. The security, speed, and decentralization offered by this technology surpass any form of money transfer in the present, it is the future of money today.
Various banks and companies in the Fintech sector have already begun to research, develop and execute applications based on blockchain technology to improve their products and services. Some are using the public network of Bitcoin or other cryptocurrencies, while others have directly decided to establish their own networks of distributed nodes known as “private blockchains.”
Blockchain technology is already being used in other areas of industry such as the insurance industry. Its potential for this sector lies in the inability to falsify documents and modify records that offer data storage in a chain of blocks.
With this advantage, insurers and their clients can rest assured that the contracts and agreements will not suffer alterations and the authenticity of these digital documents can be tested at any time using the cryptographic information.
Other applications hitherto implemented focus on combating piracy in the music industry, drug certification, the protection of diamond property titles and luxury watches, registration of data from nuclear power plants and applications for electoral processes and other governance activities.
In short, blockchain technology eliminates the need for intermediaries to certify the authenticity of a document that is digitally registered in the blockchain.
Blockchain technology has come to simplify processes that hitherto depend on third parties and strengthen the security of registered documents against modification and/or theft.
