Blockchain, a term now abused and inserted inappropriately in many contexts because it is cool and makes us feel important.
Sounds like in the early 2000s we heard from our shoemaker who had opened his website and he has no idea about what doing with a website.
But what is a blockchain ? What is his purpose? And why is it useful in some situations?
The BlockChain is a distributed and decentralized digital database, shared on a series of nodes, verifiable by anyone and immutable over time.
It is a digital register, whose entries are grouped into blocks linked together in chronological and sequential order, whose integrity is guaranteed by the use of cryptography
Decentralization is guaranteed by the network of nodes distributed around the world, and each of these has a copy of the database, which is distributed among all nodes in the network. To put it simply, nodes are computers around the world owned by individual enthusiasts or large mining companies.
Each new block addition to the distributed blockchain is globally governed by a shared protocol.
Once the addition of the new block has been authorized, each node updates its private copy with the guarantee of automatically discarding fraudulent or incorrect blocks.
Therefore the information written inside the distributed blockchain, owned by each node will always be visible to everyone and this information will never be changed in the future.
It is practically impossible to change information within a block, the computing power required would be enormous.
Thanks to these characteristics, the blockchain is intrinsically superior to normal databases and central controlled registers, managed even by recognized and regulated authorities.
As with every product, variants are developed and various types have also been developed for the Blockchain, created to meet the various needs of every actor operating in the world.
in detail:
– Public blockchains: Blockchains are open to everyone and accessible to anyone. Each node holds a copy of the database and can participate in the decision-making process regarding the state of the ledger. They are defined as “permissionless”. Example: the Bitcoin blockchain
– Private Blockchains: They are closed Blockchains where only one or more pre-selected nodes can perform the function of validating the network. They are defined as “permissioned”. Example: the Blockchain of a private foundation or a company
– Mixed Blockchains: They are partly public and partly private Blockchains
– Sidechains: They are blockchains derived from the mother blockchain but connected to it. They are in effect autonomous blockchains on which it is expected that there are coins / tokens different from those circulating on the parent chain but which, if necessary, can “move” from the sidechain to the parent chain and vice versa.
To recognize a blockchain we need to find these elements:
– Transaction (transfer of value from one address to another)
– Block (element that contains transactions)
– Node (element of the network that performs for example mining or validating transactions)
– Peer to peer network (network in which all nodes can communicate with each other)
– Smart contracts that deal with the management, fulfillment, execution and payment of the agreements between the parties
In these days, the blockchain is used practically only for payments and exchange of goods and services.
But we can already speculate that in the future, its usefulness may be much wider.
To date, it is assumed that the blockchain can be used for situations where traceability and information security are required, such as:
– Sharing of health information between different platforms and institutions;
– Schools, academia, training areas, issuing of certificates
– Management of sporting events, demonstrations, Olympics
– Management of betting in general and casinos
– Real estate sales and land registers
– Traceability of non-profit and charitable donations
– Monitoring of guns, ammunition and explosives trade
– Law enforcement and public safety management
– Cybersecurity
– Systems for digital and biometric identification
– Production and sale of diamonds or raw materials
– Insurance and leasing sector
– Wills and inheritance
– Tourism
– Traceability of supply chains
– Certification of works of art
– Transparent online voting, safe from manipulation and fraud
– Banking, finance and investment platforms
– Payment and money transfer systems
– Loyalty cards and gift cards
– Telephony
– Trade and industry
– Automotive sector
Summarizing the Blockchain:
– It is decentralized (it does not have central authorities, everyone can see, use and consult it but no one owns it)
– The protocol is open (in public blockchains)
– Certifies that “something” (a transaction of value, a change of ownership) has taken place. The transaction cannot be censored by a central authority
– A transaction cannot be prohibited, censored or regulated by a sovereign entity (e.g. credit or debit card blocking)
– It is verifiable by anyone (in the traditional financial system, the system controls everyone while in the blockchain ecosystem, everyone controls the system)
– Cannot be tampered or falsifiable (intrinsically safe consensus protocol)
– Solves the problem of double spending
– It is immutable over time. Once a transaction has been validated, it is fixed for “life”
– It is dynamic in the sense that blocks are always added