In recent years we have all heard of Blockchain in relation to its most famous application: Bitcoin .
It is important to know, however, that Bitcoin is just a declination of Blockchain, which represents a new technology being implemented in different fields and that will allow to obtain some advantages that have not been reached so far.
Let us start at the beginning: how can we define a Blockchain?
Blockchain is based on a distributed register of information located within a network of nodes, to simplify think of a series of networked PCs.
The nodes can read and modify this register: to help you try to imagine a group of authors intent on structuring a book, where each of the authors can write something that must be agreed between all of them or by the established majority.
In fact, a key point of Blockchain technology is that the information register can be modified and updated but there must be agreement between the nodes that are part of the network: the number of nodes sufficient to allow for the modification of the information register is established in the different types of networks.
When the consensus is reached, the registry is updated with a new block containing the information related to the transaction, of which everyone will be aware and will have to take it into account in subsequent transactions.
The features of the Blockchain
The features of this technology allow you to:
- digitalize information and data;
- Decentralize the information: this information is no longer stored in a single central server (with all the risks involved) but is distributed among all the nodes that are part of the network;
- Traceability of transfers: the information is public and traceable;
- Disintermediation: intermediaries or central institutions that validate the information can be excluded, think for example of the figure of the notary;
- Transparency: the information is visible to all and therefore everyone can consult and verify the information;
- Immutability of the register: the information previously recorded in the register cannot be modified by a single node but the multiple consent rule always applies;
- Programmable actions/transfers: through the development of Smart Contracts, we can trigger actions when certain conditions are met.
What are the areas of application of the Blockchain
We all imagine that the field of application of this technology is finance: this is one of the sectors in which a technology of this kind can be successfully applied and in fact it is the sector that has been the first to respond to the stimuli that came from the revolution started by Bitcoin and in general by the cryptocurrency, also to defend itself from these new tools that could change considerably the business model of finance.
It is undeniable that global financial institutions are closely observing the development of the Blockchain in the cryptocurrency sector, with an attitude that has been very cautious so far, but that will have to converge towards an opening in this sector, because we are talking about applications that were born 10 years ago: in recent years the substantial private investments have led to increasingly interesting developments and underestimate this development could be extremely harmful to the world of finance as we know it today.
The areas of application, however, are not only in finance: one of the characteristics of the Blockchain network is the traceability of the information contained in the register and traceability is one of the key points of sectors such as food and fashion, where we find some examples and studies for the adoption of this technology.
Another example is the application in the public administration: a sector that requires the validation of documents by offices or bodies in charge.
Think of how many intermediaries could be excluded, using a technology that makes disintermediation one of the key points.
Since January 3, 2009 at 18:18, the first Bitcoin block (called “Genesys Block”) was generated on a Blockchain network, this technology has made incredible evolutions and teams working on new projects are more and more.
All the detractors, who believed it was a technology intended only for a few nerds, had to reconsider after the approach by large companies and the openness to the adoption of this technology by world institutions.
And you have already taken the first step in the Blockchain, perhaps by buying a Bitcoin? Beware that today the price fluctuates around 9.000€!
In the next articles we will go into some examples of application of the Blockchain technology.