BLOCKCHAIN TECHNOLOGY: BITCOIN AND LYBRA

The term “blockchain” indicates a chain of blocks and it is at the basis of bitcoin, the electronic money. For many it is a technology destined to change the functioning of finance and commerce on the web, but is it true?

THE BIRTH OF THE BLOCKCHAIN

The idea of ​​the blockchain originated from Satoshi Nakamoto, a pseudonym conceived by a group of computer scientists who created the bitcoin based on blockchain technology. Thanks to the bitcoin, it is possible to send online payments directly from one entity to another without passing through the banks; in fact, the value of the bitcoin depends exclusively on the trust of the investors.

Although this was the initial purpose, however, things did not go exactly that way. The big banks have shown interest in developing the blockchain technology, even in closed networks, to create a new form of digital money.

HOW DOES BLOCKCHAIN WORK?

As we know, any transaction requires a guarantee, so by eliminating the intermediary, i.e. the bank, it is possible to carry out anonymous encrypted transactions and stores all the transactions in a public register distributed on the network. Being all the data of a transaction not stored in a single PC, but on several machines connected to each other, all the physical computers participating in the blockchain act as “nodes”. It is therefore not difficult to understand how cryptocurrencies are so appealing in the eyes of criminals.

This chain of data blocks (transactions) must then be verified, a guarantee that serves to prevent a user from selling or spending money he/she does not have. To do this, there is a communication protocol that certifies and approves the transactions, and then stores them in the ledger, a sort of public register. Through a process called mining, a physical computer performs very complex mathematical calculations and gives the OK to the operations.

The main features of this still unknown technology are:

  • Immutability of the register;
  • Traceability of transactions;
  • High level of security thanks to cryptographic techniques.

Thus explained, it is clear how the blockchain is safe, but also irreversible, because what is done with bitcoins cannot be cancelled, and this could be a problem for the users.

OTHER USES OF BLOCKCHAIN

In addition to the exchange of bitcoins, the blockchain has many other possible uses, such as certifying the exchange of stocks and shares, “authenticating” a contract or securing the votes collected through online voting.

Security, urban transport, energy, copyright, the charity sector and the fundraising are just some of the areas where blockchain can be applied. In fact, many companies have already started using it in their business. Why should you introduce the blockchain technology into your business? Below some reasons:

  • It is digital and therefore suitable for any sector;
  • It works through cryptography, its technical features prevent damage and possible loss of data, making it more than safe;
  • It is very reliable being chronologically organized;
  • It is fast because it does not need to be validated by a third party.

The novelties about the blockchain are not over and involve the entire world population thanks to Lybra, the new digital currency of Facebook with which, from 2020, it will be possible to make purchases on the web and exchange sums of money. Perhaps the use of Lybra will also be possible in the physical world, to make transitions similar to a transnational payment.

What will happen? Analysts hypothesize that most industries could benefit from the use of the blockchain, so we have to wait and see the next developments.

In the meantime, you can take a look at our articles on other innovative technologies, such as big data, augmented and virtual reality and much more.

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