THE BLOCKCHAIN
By CoinTradeUp Team
published in September 17, 2024
Blockchain is a revolutionary, decentralized, and transparent technology that redefines how information is exchanged and stored. Without intermediaries, it ensures the authenticity and security of data. Discover how this innovation, already adopted by many sectors, could sustainably transform the economy, logistics, finance, and energy.
What is it?
It is a technology or tool that can be thought of as a decentralized, transparent, and secure ledger (or database).
Blockchain is used to transmit and store information without the need for a trusted third party.
It is a technology or tool that can be thought of as a decentralized, transparent, and secure ledger (or database).
Blockchain is used to transmit and store information without the need for a trusted third party.
The absence of a trusted third party is made possible by the decentralized nature of the blockchain. Indeed, this ledger, which stores the information, is shared identically by all stakeholders. When information is added, it is first validated and then transmitted to all stakeholders, also known as "nodes."
As a result, each node contains the same information, making it nearly impossible to tamper with.
As a result, each node contains the same information, making it nearly impossible to tamper with.
Since each new piece of information added to the blockchain is done chronologically, and no information is ever deleted, complete transparency is achieved. You can trace where the information came from, how it was transferred from one person to another, and where it currently resides.
Security is ensured in various ways. Naturally, the more nodes there are, and therefore more copies of the blockchain, the more secure the blockchain becomes.
But right from the start, when information is added to the blockchain, cryptographic processes are applied to validate and secure the information before it is permanently added to the blockchain.
This is the work of miners.
But right from the start, when information is added to the blockchain, cryptographic processes are applied to validate and secure the information before it is permanently added to the blockchain.
This is the work of miners.
Where does it come from?
The technology was developed in 1991 by two researchers from Bell, Stuart Haber and W. Scott Stornetta, who were originally looking for a way to transmit information (a document) while ensuring its authenticity and immutability.
The technology was developed in 1991 by two researchers from Bell, Stuart Haber and W. Scott Stornetta, who were originally looking for a way to transmit information (a document) while ensuring its authenticity and immutability.
What is it used for?
As mentioned initially, the technology was developed to transmit information in a completely secure manner.
Thus, the principle of blockchain can be applied to any field where information is exchanged, and where stakeholders (companies, institutions, individuals, etc.) want to ensure the accuracy of the information.
As mentioned initially, the technology was developed to transmit information in a completely secure manner.
Thus, the principle of blockchain can be applied to any field where information is exchanged, and where stakeholders (companies, institutions, individuals, etc.) want to ensure the accuracy of the information.
In logistics, for example, blockchain can ensure product traceability and keep a record of all operations involved in the supply chain.
In banking, the technology can validate transactions without the need for an intermediary such as a clearinghouse.
In the energy sector, blockchain can enable the exchange of services and values without the intervention of an external regulatory authority, leading to the creation of local production networks.
But more broadly, one of the undeniable advantages of blockchain is its ability to eliminate the need for a trusted third party to guarantee a transaction or information exchange. Today, trusted third parties are present everywhere and essential for the smooth functioning of the economy, but in return... they inevitably increase the cost of a transaction or information exchange between two entities.
Let’s take a concrete and easy-to-understand example: banking!
A wants to send money to B.
A wants to send money to B.
- A logs into their bank's website or app.
- A confirms the transfer by entering B's IBAN.
- B receives the transfer from A in their bank account.
On the surface, it seems simple!
But someone needs to make sure that A actually has the money in their account before validating the transfer, that someone verifies that B's IBAN corresponds to a valid IBAN from a bank capable of receiving money.
B must also trust their bank to know that when the money appears in their account, it is available.
Not to mention the internal checks and validations performed by the banks in managing the money (because a bank does not hold all the funds of its clients in their bank accounts).
But someone needs to make sure that A actually has the money in their account before validating the transfer, that someone verifies that B's IBAN corresponds to a valid IBAN from a bank capable of receiving money.
B must also trust their bank to know that when the money appears in their account, it is available.
Not to mention the internal checks and validations performed by the banks in managing the money (because a bank does not hold all the funds of its clients in their bank accounts).
But A and B trust the banking system, and everything works fine!
The bank is a trusted third party.
The bank is a trusted third party.
And what about cryptocurrency?
To be precise, we refer to crypto-assets or digital assets.
These are products based on a technology, blockchain, and are subject only to the laws of supply and demand.
In the vast majority of countries, a digital asset is not considered currency because it does not have legal tender and does not exist in the form of coins or banknotes.
Furthermore, a crypto-asset does not rely on a trusted third party, such as a central bank when we talk about currency.
These are products based on a technology, blockchain, and are subject only to the laws of supply and demand.
In the vast majority of countries, a digital asset is not considered currency because it does not have legal tender and does not exist in the form of coins or banknotes.
Furthermore, a crypto-asset does not rely on a trusted third party, such as a central bank when we talk about currency.
In the case of a crypto-asset, the information stored in the blockchain is a transaction, such as a financial transaction. The blockchain will store information like:
X amount transmitted from A to B
And so on...
X amount transmitted from A to B
And so on...
And if a value is assigned to a transaction, with the law of supply and demand doing the rest, a price for this crypto-asset will form.
Just because a product has a price does not mean it can be considered a currency!
So... what is a currency?