Blockchain: a technology beyond Bitcoin

Categories: Blockchain, NewsBy Published On: July 31, 20210 Comments

Lately, blockchain technology is on everyone’s lips, not only because of cryptocurrencies, but also because of the capabilities it offers. The term is a rather approximate representation, since it would really be something more like files that store certain information.

What is blockchain

It is a unique record of everything that is happening within a network where all nodes connected to it have a copy. The blocks of a blockchain store information from the block that precedes them and give information to the next block to be created.

Different information is stored within each block. The most important element stored in a block is a certain number of transactions. Additionally a block can hold other important data, such as the identifier of the previous block, a timestamp or the nonce. It is precisely the block and the elements it stores combined with cryptography that makes blockchain technology secure.

Any attempt to manipulate a transaction in a block stored on the blockchain will be sterile. This is because all the elements of the block are stored mathematically in a hash, which will change if we change any parameter of the block. The network will detect the spoofing attempt and reject it. In addition, the older the block, the lower the probability of tampering, since it would force the alteration of the blocks after the one that has been tampered with.

As we can see, changing uppercase to lowercase or removing a single space generates a different hash.

Origin of blockchain technology

Although Bitcoin and the rest of cryptocurrencies make use of the blockchain, this technology was not really developed by Satoshi Nakamoto. The blockchain technology was developed in 1991 by Stuart Haber and W. Scott Stornett. Their first implementation of this technology sought to create a blockchain based on cryptography in which the timestamps of documents could not be manipulated.

Later, in 1992, they improved the system by introducing Merkle Trees, improving efficiency. This mechanism allowed many more documents to be stored in a single block.

Adam Back, in 1997, developed HashCash, an alternative monetary system based precisely on the above precepts. Wei Dai, in 1998, conceptualized B-Mony and in 1998, Nick Szabo, who developed the idea of smart contracts, announced Bit Gold. Both B-Money and Bit Gold were never developed and remained conceptual elements. It should be noted that many believe that Bit Gold served as the basis for the creation of Bitcoin.

Painting the living room

A man enters a paint store and asks the clerk for a one-liter bottle of canary yellow.

The clerk looks up on the computer the color dyes to use and the proportions to convert a can of white into a can of canary yellow. The clerk then adds the dyes to the canister, plus a small amount of paint from an undetermined canister. He closes the jar and introduces it into a machine that shakes it for a while until everything is mixed and we obtain the desired color.

Before handing over the can, the clerk checks that the color is correct and collects a very small sample of the paint. He gives the can to the customer, pays him and goes home to paint.

From the paint can to the block on the blockchain

According to our example, a block is pretty much the same as a can of paint. The caveat is that in our block there is information instead of paint.

The dyes introduced to the white color to obtain the canary yellow are simply the transactions and other data that are stored in a block. In our example we get a color, but in a block what we get is a hash, a unique identifier based on all the information contained.

Remember the indeterminate pot of paint we added? Well, this paint sample is from the previous client. When a new block is generated, it stores information from the block that precedes it, to prevent a new block from being introduced in between. And the paint sample that it takes before selling the paint can, is the information to generate the next block.

One more thing, do you remember that the customer has paid the seller? Well, when a new block is generated, the miner who created it is paid with new cryptocurrencies that come into circulation and that did not “exist” before.

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