In our times, there has been a tremendous evolution of technology that among others has extended human capabilities. One of the latest adapted concepts with a significant impact in various sectors is the Blockchain technology.
This term was first coined in 2008 by an individual (or group) under the name of Satoshi Nakamoto in a white-paper entitled Bitcoin: A Peer-To-Peer Electronic Cash System.. This paper represents a decentralized peer-to-peer version of the electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution. While this paper negotiates the term digital currency and introduces an exciting and innovative of a decentralized payments system, the underlying technology (Blockchain) was truly revolutionary and has a broader impact in the world around us.
Virtual currencies
The technology at the heart of Bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently in a verifiable and permanent way. All those transactions are gathered into cryptographically protected blocks which are verified by consensus through the connected participants in the system. As mentioned below, each block contains transactions but in general it can be programmed to represent almost anything, from money (as in the case of the Bitcoin) to a birth certificate, even small executable scripts ”contracts”(Etherium). Once a block is verified, it is stored/linked with the previous block in the blockchain in a proper linear, chronological and the information will never be erased. This chain can be compared to the likes of a traditional database as it contains an aggregation of data.
To better understand the overall procedure we should mention that blockchain technology, is not a new technology but a combination of proven technologies applied in a new way. There are three principal technologies that combine to create a blockchain:
- Asymmetric cryptography
- Distributed network with a shared ledger
- An incentive to service the networks transactions, record-keeping and security
The orchestration of those technologies results to a system of digital interactions which eliminates the need of a trusted third party. The work of securing digital relationships is implicit supplied by the elegant, simple, yet robust network architecture of blockchain technology itself.
