BlockChain, BlockChain and more BlockChain

For several months we have been hearing the term BlockChain more frequently. Whether in the business, government or highly recognized companies such as Visa, MasterCard, Amazon, Google and IBM. But… What is BlockChain really and what benefits could it bring to my company? Here we tell you!

BlockChain se proyecta como una de las 10 tecnologías que tendrá mayor impacto en la Industria 4.0 de esta década. Su idea nació en los 90’s con el movimiento Cyberpunk, pero no fue sino hasta el 2008, que un tal Satoshi Nakamoto, la volvió una realidad al crear el BitCoin: la primera Criptomoneda de nuestra historia.

BitCoin began as a protest to the current financial system, eliminating intermediaries by allowing P2P transactions, and therefore the additional commissions and costs that this represents.

The BitCoin BlockChain is used to store each and every one of the transactions carried out with this cryptocurrency. Its records are public and its users are, in principle, anonymous. They are identified with a 34-digit alphanumeric address and their identity is not shown for security, since anyone who has access to the transaction ID (called hash in the different BlockChains) can know exactly the value traded, the date, time , balances and any additional information that is stored of the transaction.

In 2015 Vitalik Buterin created a new BlockChain called Ethereum including a very valuable development for this ecosystem, Smart Contracts or Smart Contracts that, as a professor says, are not contracts or are smart, they are a group of rules and regulations that can be customized according to the needs of each user or company and allows automating any process, significantly reducing costs and times, for example, the BBVA bank a couple of years ago managed to make transactions by exchanging Euros for Mexican pesos in 15 seconds, a process that normally takes 2 3 days, with a cost reduction of more than 90%, also intermediate in the shipment of 25 tons of tuna between Mexico and Spain, the process of shipment, verification and authorization took between seven and ten days, the complete operation was achieved in just two and a half hours, all this thanks to Smart Contracts.

To understand what a BlockChain, or chain of blocks, is, we need to be clear about three things: the first, that a block is a set of stored and sealed transactions that is immutable, creates a chain by interconnecting with the immediately preceding block and, simultaneously, with the next block by means of something called a hash.

The second thing is that a hash is the unique ID of each transaction. When a block is closed, a hash is generated and assigned to that block that has just been closed, making it unique within the BlockChain and each new block that is generated starts by storing the hash of the immediately previous block. So the blocks remain interconnected with each other.

And the third is decentralization. In the BitCoin BlockChain there are more than 100,000 computers interconnected with each other, located in different parts of the world. Each computer is known as a node and as it is distributed in different parts of the world, it allows the network to be decentralized. Ensuring unprecedented stability, because if 50,000 nodes stopped working, there are another 50,000 working that would keep BitCoin BlockChain alive and afloat.

Now imagine that we enter a warehouse and see thousands of boxes interconnected with each other by a magnetic tape that allows us to include a unique numbering to each box. And that in each of them documents are stored with reports of all the transactions that have been carried out in a bank since its creation. That would be physically a copy of a BlockChain.

The boxes would be the blocks, the documents contain the hashes of each transaction stored in each block and the magnetic tape allows us to have the traceability of the unique numbering of each box, that is, the hash of each block that is interconnected with the block immediately previous.

In reality each node stores a copy of the BlockChain to which it is connected. Every time a block is closed, all nodes are informed simultaneously, as well as the hash that identifies it. That is why when someone tries to alter information in a block, the BlockChain rejects the altered block and does not store it, because it does not coincide with the other copies that are distributed among the nodes.

For example, if I want to duplicate a BitCoin transaction or change the receiving wallet, my transaction and my block are rejected by the BlockChain, since the information stored does not match the more than 100,000 copies that are distributed among the other nodes.

Imagine a development of a BlockChain for voting, where once a person marks their vote, it cannot be modified because in case of trying the BlockChain would reject it as it does not coincide with the copies stored in the rest of the nodes. Or imagine a BlockChain that stores the medical history of the citizens of a country, if a user undergoes a procedure in one clinic, then in another, then changes city, etc. the reduction in service times and costs is quite significant, or that banks will implement developments like the example of BBVA.

Currently there are thousands of projects in different sectors of the industry and with very varied objectives. In China, the government issued a CBDC (Central Bank Digital Currency) and is delivering it directly to citizens. It is partially paying salaries to its state employees and has agreements with thousands of businesses to receive this CBDC, all with BlockChain technology. The European Central Bank will do something similar and for every Digital Euro it issues, it will take out a physical Euro. All this is possible thanks to the fact that BlockChain technology can be used and adapted to the needs of each client or group of clients.

Currently there are different types of BlockChain with more advanced developments. One of them is Symbol, developed by NEM Software, it allows interconnecting private and public BlockChain, reducing the number of transactions reported in the BlockChain, creating hybrid solutions and improving security. This technology has a layered structure that we had not seen before, this gives us the freedom to make any project that a company has a reality by automating processes and significantly reducing time and costs.

References

• https://ethereum.org/
• https://cointelegraph.com/news/mastercard-and-visa-are-making-bold-moves-toward-mass-crypto-adoption
• https://www.dw.com/en/china-digital-currency-yuan-bitcoin/a-55134692
• https://news.bitcoin.com/satoshi-nakamotos-bitcoin-white-paper-a-12-year-old-summary-of-robust-unstructured-simplicity/
• https://www.bbva.com/es/bbva-realiza-transferencias-internacionales-tiempo-real-europa-mexico-ripple/
• https://symbolplatform.com/latest/why-not-have-the-best-of-both-worlds