What is Blockchain?

Blockchain is a new paradigm of information exchange where the objective of the technology is to offer confidence in the data it handles in an environment that a priori does not have to be reliable.

From a more technical point of view, Blockchain means a chain of blocks, technically it is a distributed database that is formed by blocks chained together

The block chain technology can be seen as a ledger that is distributed among all the actors that make up a collaborative network among them. This book is distributed in such a way that, if an attempt is made to modify one of the book's annotations, the rest of the network's nodes can unmistakably identify that another node has attempted to modify the book and is excluded from the network.

The general ledger is composed of a technology, which makes it impossible to modify or review any record. Just as in a general ledger, if one of the entries needs to be updated or corrected, this must be done by adding a new line in the general ledger that corrects the previous entry, just as it was done in the accounting books. In this way the distributed general ledger can only increase its size.

The blockchain technology is based on four basic pillars:

  • Distributed: Blockchain is a decentralized, cryptographically protected database in which each node has a copy of all stored information.
  • Transparent: All transactions are recorded and can be queried by the actors belonging to the network.
  • Unchangeable: Once entered, the information cannot be modified by any participant or administrator involved without being detected by the rest of the network components.
  • Reliable: Trust lies in consensus among participants, without the need for a third party to verify that all participants comply with the rules.

How does it work?

The blockchain technology is based on two aspects to offer the confidence, on one hand, in cryptography and on the other hand in the hashes

The cryptography nassures us that all actions executed on a network are executed by whoever claims to be, it is not possible to send an action to blockchain on behalf of another person without knowing their 'keys'.

The hashes sare mathematical functions linked to cryptography that take very large data and transform them into small data that represent the original data unambiguously. If we change a single letter in a transaction, the resulting hash is diametrically different from the original. The hash helps us to verify that a data has not been manipulated.

The combination of both technologies allows us to create blocks in which actions are included by well identified participants, from these blocks the hash is calculated. The basis of blockchain technology is to include this hash as part of the next block, so that the blocks are linked. Under this assumption, if a block is modified, the next block would be the one to raise the alarm since it contains the hash of the previous block and so on.