Blockchain has become a buzzword in recent years. Its use is expanding worldwide, and its implementation is one of the immediate trends for the near future. Nowadays, trading platforms are slowly introducing crypto as the primary form of day trading, including platforms like https://profit-builder.org/.
To understand the Blockchain, we must start with an important concept: decentralization. It consists of a system that can carry out any activity, be it economic, political, or social; it is distributed among many actors that participate in it and are not subject to centralized control; that is, the decisions are shared and not taken by a single authority.
The creation of distributed accounting books, known as “digital books,” is the main characteristic element of this technology, where said books are public and can be consulted by anyone without having to be connected to the Internet.
Goodbye to intermediaries
The current way of doing things without intermediaries is through the chain of blocks, where users can make transactions directly with each other. However, it is essential to note that intermediaries traditionally have their own information registration and control system, which means an additional cost for companies.
If you want to buy a product online with credit or debit cards, the payment processor is responsible for confirming and executing the debit or charge to the card; in today’s world, intermediaries are necessary for transactions to be carried out, unlike the Blockchain that eliminates these intermediaries and gives users more control over their data.
Technology before Bitcoin
The Blockchain was created as part of a project that would function as a decentralized digital payment system without intermediaries, which could interfere with money or data.
This technology is linked to Bitcoin and other digital currencies. The money is distributed among many users, which makes it very difficult for a single individual to control it.
It is not a perfect solution; it should be noted that it is a technological platform that may be subject to inconveniences of use, this new technology is not new, but its implementation in financial transactions has been limited.
Before bitcoin became popular, some banks and governments were already interested in blockchain technology to monitor money movements. For example, the European Central Bank (ECB) reported on how blockchain technology could make money management more efficient.
Before Bitcoin, there was no way to make secure and reliable digital transactions. Therefore, using third parties to process the final transactions was essential. Unfortunately, the intermediaries are usually private companies or governments, which generally charge a commission for their services, undoubtedly representing an additional cost for the companies.
Operation of a transaction in the Blockchain
Through this platform, users are allowed to transfer digital values; where the way to use it is through a series of steps; first, the user must connect to a node and send their request. Then, the node evaluates the request and decides if it is valid. If it is correct, it is added to the block of transactions built by other nodes at the same time as this one.
The data is encoded and transmitted through the computational power of the nodes to be processed. Finally, the nodes validate the data to ensure no errors and then correctly process the operation.
It is important to note that its use is not exclusive to payments. The technology also allows the exchange of data and documents, including contracts and medical or legal records.
An example of a transaction on the Blockchain is when someone purchases a product with Bitcoin. First, the payment processor receives the credit or debit card and confirms that it has sufficient funds to cover the purchase. The issuer can then verify that the user can make the payment in real-time. Finally, the payment processor sends the payment data to the Blockchain, and the information is recorded in a distributed ledger.
Conclusion
Blockchain is a platform that allows digital transactions to be carried out with total security. Its beginnings were in 2009 when the programmer Satoshi Nakamoto published an article about blockchain technology and its possible use in finance.
This concept is beneficial for individuals or companies that buy and sell goods or services throughout the world. Blockchain is the term used to describe a public and distributed database, where each recorded transaction is then signed with a public key and stored in the network of nodes.
