In the constant search for information about the philosophy, history, and technology of Bitcoin, the world’s most revolutionary decentralized payment system, a set of elements and positions have been generated that can often confuse users interested in this technology. If you are new to Bitcoin, learn this procedure for using the exchange platform.
The Blockchain is the underlying technology of Bitcoin. This decentralized network allows anyone to send and receive payments to each other without intermediaries, which is undergoing a revolution similar to what the Internet experienced at the time.
Described as “the protocol of the future” for its possible uses in all sectors of the economy, including private financing, the exchange of values, and global commerce, blockchain technology has positioned itself as the form of payment for the future.
Elements that make up the Blockchain
Widely known for its use in Bitcoin; however, not all experts agree on how it works and how disruptive it can be to the financial world.
This technology is a database that is distributed in the form of a distributed global network, allowing people to conduct private transactions digitally without centralized third parties holding sensitive information.
Blockchain is a distributed consensus technology. In other words, it is a decentralized and transparent registry that allows anyone to send and receive payments instantly without intermediaries. Its operation is based on rules and protocols that guarantee the system’s integrity and process.
They are the ones that make the operation of the network possible, individuals or companies that use a specific application to access the Blockchain and carry out transactions. In this sense, all participants can be considered network nodes, which must accept these protocols to connect and participate in the network. Once a user clicks, they can check the distributed ledger of previous transactions and verify their validity.
The basic concept is that all transactions are immutably recorded in a ledger distributed among the network participants; anyone who tries to alter them would be detected by the other participants and automatically disqualified from the blockchain network, in which they participate voluntarily, without any obligation or commitment.
Each participant has a complete copy of all the information contained in the Blockchain and can access it from anywhere in the world. Furthermore, once posted, transactions cannot be deleted or modified.
In this technological platform, the digital assets that can be accessed through a blockchain address are stored in binary code.
Assets can be digital currencies ( bitcoin), tokens (Ethereum), physical bonds, or coupons, and can also be transferred from person to person, without intermediaries or at any cost. Transactions are immediate and transparent.
This protocol allows data transfer securely and reliably between two parties; perhaps its popularity is due to Bitcoin. Still, it has many real-world applications beyond the financial world.
Digital assets are objects stored on the Blockchain, not physical. It means there is no real copy of the thing, but the system locates it and gives it value. Each of these species of virtual currencies has its account on the network.
The value of these digital assets rests on their ability to transform the market. The best-known examples are cryptocurrencies like Bitcoin.
Many practical uses have been given to this technology, mainly the recording of digital transactions, such as the exchange of cash for products and services.
It is instrumental in emerging markets where there is little trust between the parties involved in a financial transaction.
These virtual titles are registered in a specific account of each user and cannot be duplicated or counterfeited. It means there is no possibility of fraud by any actor involved in the operation.
Blockchain for international operations
Blockchain technology allows companies to carry out international operations faster and more efficiently. Most countries use currencies with a fixed value, such as the US dollar or the euro. These notes can be exchanged in any country that uses the same currency, making transactions easy.
Some countries use their cryptocurrencies to facilitate commercial or government transactions to reduce the costs associated with customs and related procedures, reducing the processing time of import and export documents. Lower prices translate into higher profits.