What´s really Blockchain?INTRODUCTIONIn simply concepts, Blockchain is a way to save information inside computer blocks; whose blocks are saved in a network, and these ones are getting chained-in, in such a way that a new block made by cryptografy depends proportionally on the previous block.
Why it is necessary to understand what is it and how it works this way to save information?Now the society is experiencing a significant change at the computer level, no just in the economy else in several areas that Blockchain technology is approaching. Whereby is not a coincidence that many developed countries and big companies be investing essentially in this technology. Likewise to be able in to take any advantage of what is it this technology and how it works, we should know from the most simple.
"This is like the maths, if you want to get Algebra and trigonometric functions, you should first learn about add".
TO WHOM IS THIS ADDRESSED?This is addressed to all people from this forum, specially to those newbie people that they are signing up constantly at the forum. Today there are many "disinformation" on internet, whereby this has been used to many people fall into scams or into "ponzi" systems where are incluided topics as "cryptocurrency, Bitcoin and the Technology". This is also addressed to the experts of this forum, me personally have noticed that there are many people with a broad knowledge respect to the several topics here are talked; even knowing this, I am sure they will find some details that will work to feed their knowledge.
WHAT IS PRETENDED WITH THIS THREAD?Though many people are conscious about what is this and how it works exaclty this information, it is pretended to give clarification to newbie people that they get in this world. It is pretended to info by a right way and it is pretended to get out of many doubts that it is found when it is searched this kind of information on internet. In this way each person will understand by a simple way the "how" that is became so complex to know how it works the blockchain technology or system.
PREFACEThe Blockchain history depends necessarily on the creation of the Bitcoin. Taking to this one as a digital financial value, it is necessary the understanding about how it works and what "money" is. By this way we find the means, not only of understanding the technology but else we will achieve to understand to the Bitcoin as a digital and real value. Should consider that "money" is not all what we have in our pocket or bank account; let´s remind before this, transactions was with metals, jewelry, products, among other things that was used as money and they allowed the subsistence at Earth.
1. WHY BLOCKCHAIN WILL REVOLUTIONIZE THE WORLD?
This a spanish news, where the media "El Tiempo" make a mention of the revolution of the world, and it is not a joke. Blockchain is revolutionizing right now all information systems, "healing" not only economics problems by worldwide but also contributing to the transparency of many aspects of the countries; one of them, the electoral systems, where in future Blockchain will be used to improve significantly the election systems in the world, giving so a bigger trust to us as population.
So, we should have clear what the world is taking and experiencing, and in fact where is addressed. Taking this in the account and analising this kinds of news, we can know that there is something "there" in that word mentioned by several media.
WHAT IS THE MONEY?As I mentioned at the beginning, one of the ways to understand Blockchain, we should first get what is Bitcoin, and to understand Bitcoin, we should get what money is essentially.
In the previous picture we see 3 classes of "money". This is essential to get first what money is and the second what Bitcoin is. As Bitcoin is digital money, we should get the type of money to which we are used to transact.
1. How we get them?At the first column of the previous picture, we watch the way in how they get or how they generate theirselves these 3 products.
The oil is gotten by drilling of the earth or what is seen right now through media and why some organizations are discussing and is by Fracking; through equipments and tools ro drill, the different companies and organizations are in charge to "generate" said resource for its diverse use.
Just as there a way to extract oil, it exists a way to generate both money as Bitcoin; in the case of the money, this is gotten by physical "printers" that Governments or States have in every country. In the case of my country Colombia, it is El Banco de la Republica, translated would be something like "Republic Bank" and this one is in charge of this. The Bitcoin unlike is generated through mining and this is one of the this we will learn in this thread.
Mining is what allows that new bitcoins are created.
2. Who control them?To the oil or its commercialization, it is controlled somehow by the OPEC (Organization of the Petroleum Exporting Countries), this one is in charge in one of their relevant aspects, as to control its production in the countries.
The physical money is controlled by every national government or state; in this case, we have a real big money (bill) about 20k colombian pesos and they are these states who regulate how much it can be producted daily.
Unlike to Bitcoin is not controlled by a specific entity, different that the others two are regulated by a small group or people; the Bitcoin basically it is controlled by all of us; that is to say, any person who be part of the mining, by somehow is having some control in the production of the coin.
3. Why are they having a value?The value of the oil is based on the ask/bid of itself, this means that what gives some significant aspect to this liquid is somebody or some people want it. If any company did not want oil for their different ideals, oil did not have any value. Obviously that some entities require it because now it can be manufactured diverse products and materials that we use in daily life.
The money we hold in our pockets or in our bank accounts have a value because of a simple reason. And is because with it you can pay your taxes; it is the only aspect about why this one is having a value. Though "money" is all that what we can use to make a mutual exchange, the state only will accept the "certificate" they issue as a financial value. And by last, why Bitcoin has a value? It is another of the things we are gonna learn in this thread... Let´s continue!
BASIC CONCEPTSFor the purpose of understanding firstly what money is, have in the account the following basic concepts, about what Bitcoin is and what Blockchain is too.
So, as an example, we have that Bitcoin would come to be another currency to use in the exchange of products and Blockchain would be the accounting sheet where transactions made with the coin are written.
Understangind in a timely manner aspects about what money is, we are gonna get now what Bitcoin is, and to get later what is the Blockchain technology, or the way to save data in a cryptography blockchain.
We are gonna approach 3 essential questions...
1.R:// The Bitcoin is really encrypted information by a secure way in a blockchain network. The development of human is based basically in the sending and receving of information; almost in every moment we are sharing information, either to communicate with someone, or at making love with a person; right now we are living in so much technology where mobile devices are the "bread of every day" of the most of all us, we can realize that in every moment we are sending and receiving information. About this is economy and about this is how Bitcoin works. When you or somebody sends Bitcoins or fractions, what they are doing is to send information by an encrypted way, what is what gives it the sercurity. The more rigorous be the security of this information what we send, it will have more value. For this is what states have to put several kind of security to the money that they print, in order to give them a greater security and this one cannot be easy to falsify. This is what gives value to the Bitcoin, the way how this one is saved, whose security to this day is almost impossible to infringe, because the only method to trespass its security, it is through a "51% attack". Then, Bitcoin is not more than an information very secured in a distributed network, where all users can watch the transactions that have been made, but they cannot see who have done theses transactions
2.R:// All of us, or at least I think so, that we all know in this forum that the creator of this wonder was sir Satoshi Nakamoto (nickname). I have taken the work to search and to share with you all the first thread of Satoshi in the forum, where he mentions that exists another one old but it is not longer anymore available. As well as the last thread where is known any mention about him. I invite you to search these threads in the forum, and I will let them you in picture way...
3.R:// As well as normal money that we use daily, Bitcoin works in a simple way; and with this I refer that, as this is money, it has some characteristics of fiduciary money we use. Characteristics as a balance sheet or an accounting book where all transactions are registered (Blockchain), some wallets where Bitcoin is storaged; (given that as this is digital money, the way to save or storage it is digitally).
WALLETSWith the following picture I pretend to show the different wallets known actually from some companies, (without the encouragement of making advertising and every reader should understand that will use or download one of them under their secutiry and will be the only responsible of its correct operation. I let you this example with some characteristics to announce and each one make a correct search about how to use one of these wallets...
KNOWING ASPECTS AND DETAILS, WE GO NOW TO WHAT IS THE TECHNOLOGY IN ITS ESSENCE.
It is important you have understood all what is explained perviously, in order to get by in a timely manner what you will read then
DEFINITION
Read the short definition in the pictureThe Blockchain technology es a way to save, send and/or to receive information by a very secure way.
The physical blocks you see at the picture are in order to illustrate what is a blockchain since the block "0" in all the chain, called "Genesis" for being the first in to create in all the chain, till blocks that are followed continually. Understanding this, we can know that every block that is created, depends informatively on the previous one, where the "names" of these known blocks as "hashes" are a dependence from its previous, obviously except Genesis Block, this one is the beginnig of all. From him depends all in a cryptographic way.
So in every block is being stored information correspondent, in this case
the transactions made with the Bitcoin.
CENTRALIZATION VS. DECENTRALIZATION
Before you can comment something about this aspect or the difference that I will talk now, I suggest yo read carefully each word I will write, because it can be confusion in to understand these concepts, "centralization and decentralization".Such as you see in the picture above, centralization is based on to have an only server or node that it contains the information and it is in charge in to send and receive the self. A disadvantage with a naked eye of this is that when the server falls or shows fails, all the comunication is interrupted. As an example, imagine that the information server of any bank would fall, as a consequence all users would stay with no communication till they do not restore the server.
Unlike of decentralization. In a blockchain network, the information is contained in all the nodes of the network, this in order that if one of them it is not or is not working in any moment, the communication would continue active, because others nodes would provide their work. This is why that is almost impossible that Bitcoin transactions fails some day, due to actually and since 2009 when was created the first information block, every time are more nodes that are joining to strengthen and speed up the transactions. These nodes or severs are computer equipments that are used to mine Bitcoin. Previously it was normal laptos and pc, but due to the mathematical difficulty to mine Bitcoins, right now it is necessary equipments more sophisticated or with a better computacional capacity to make the maths tasks and be able to generate the new bitcoins.
According with the previous, more or less we can imagine the blockchain of the Bitcoin right now, and the blocks that numerically overpass the 500,000; and we can reference them in the following way in the next picture...
Taking in the account and sizing all the blocks that have been created in the Bitcoin blockchain. These are stored identically in all and each one of the nodes that exist in the network, allowing a greater transparency and avoiding similarly a 51% attack to the network where bitcoins look committed.
...In a graphic way, the blockchain in the network would be as follow.
CONCLUSIONBlockchain is a way to storage data very securely, as long as the case of Bitcoin, it is had the enough nodes to avoid a 51% attack that probably would infringe any blockchain network; to understand essentially what is this kind of attack, is basically where hackers take the control of the most of nodes (more than 50% of the total amount of nodes in the network) and would reprogram and change all the information. Not only can be used to this mechanism to storage transactions as the case of Bitcoin, else it can be used to file, send or to receive information, in such a way we can secure it for diverse tasks, either in a electora process or in judicial aspects, as well as the storaging of information, avoiding by this way "agents" that can adulterate it for their own benefits.
THANK YOU SO MUCHReferences are in a mode oF picture and in spanish because they are pictures from a document that I have been made for a conference that I will be giving in the next days.
