Blockchain

What is a Blockchain?

Blockchain is a shared and "immutable" data structure. It is defined as a digital register whose entries are grouped into "blocks", chained in chronological order, and whose integrity is guaranteed by the use of encryption. Although its size is destined to grow over time, it is immutable in the concept of "how much". Its content once written through a standardized process is no longer editable or erasable, unless the entire process is invalidated. Such technologies are included in the wider family of distributed registers (Ledgers), that is systems that rely on a distributed register, that can be read and modified from more nodes of a network. It is not required that the nodes involved know each other’s identity or trust each other because, to ensure consistency between the various copies, the addition of a new block is globally regulated by a shared protocol. Once the new block is authorized, each node updates its private copy. The very nature of the data structure ensures that it will not be manipulated in the future.

Story

The first blockchain was introduced in 2008 by Satoshi Nakamoto (pseudonym of an author whose identity is still unknown), and implemented the following year, with the aim of serving as a "ledger" (register of all transactions) of the emerging Bitcoin digital currency. Satoshi Nakamoto used the words block and chain separately in the original 2008 article. In 2009 the creation of Satoshi Nakamoto, Bitcoin, was used for the first time to purchase a pizza. In August 2014, with Bitcoin already achieving global notoriety, the size of its blockchain reached 20 gigabytes; by March 2022 it had surpassed 450 gigabytes. In 2014, the term "Blockchain 2.0" was used to refer to a new way of using blockchain. The idea was to allow people excluded from the current monetization to get hold of a reliable and secure monetary deposit with the ability to protect privacy and monetize their information. According to some authors it also has the potential to solve the problem of social inequality by changing the way wealth is redistributed.

Decentralization and Validation

Decentralized blockchain leverages ad hoc messaging and distributed networking to make sure it stores data across its entire network and avoids having a single point of failure so that there is no centralization that crackers could exploit to take down the whole system. Blockchain security methods also include public key encryption. The public key is an address on the blockchain. Value tokens sent over the network are recorded as belonging to this address. Instead, the private key is like a password that allows its owner to access its digital resources or interact with the various features of the blockchain. Data saved on the blockchain is considered incorruptible. Each node or miner in the decentralized system has a copy of the blockchain: in fact, the quality of the data is maintained thanks to a massive replication of the database. There is no centralized official copy and no user is more credible than others, all are at the same level of credentials. Miner nodes, meaning users, validate new transactions and add them to the block they are building after verifying the entire blockchain. Once the block is complete, they transmit it to the other nodes in the network. The blockchain uses different timestamp schemes to serialize changes. The growth of decentralized blockchain goes hand in hand with the risk of centralizing nodes, because the IT resources required to operate and manage ever larger data become increasingly expensive. In fact, many miner nodes pool together to complete blocks and get cryptocurrencies.

Applications

Blockchain technology has great potential to transform business models in the long run. Blockchain is more of a basic technology, with the potential to create new technologies and new foundations for the global economy and social systems, but also a destructive technology that attacks the traditional business model. The use of blockchain promises to bring significant improvements to global supply chains, financial transactions, accounting assets, and distributed social networks. This new technology can be integrated into several areas[29] and its protocols make it easier for companies to use new methods to process and manage digital transactions. Examples include: payment systems and digital currencies that facilitate crowdsales, implementation of prediction market and generic governance tools. The blockchain can be used as a tool to certify the certain date of a document and its not having undergone any change. This block chain application, obtained by entering the hash of the documents you want to certify, is called notarization. An example of such use is the notarization of the movements of the trucks that transport the earth of a yard, in order to guarantee the respect of the constraints and the environmental norms It can address the need for a trust service provider, provide less litigation capital, and have the potential to reduce systematic risk and financial fraud. Automate several processes that used to take a long time to do manually, such as business integration. Most blockchain applications include cryptocurrencies like: Bitcoin, Blackcoin, Dash and Nxt and blockchain platforms like Factom as a distributed registry, Gems for decentralized messaging, MaidSafe for decentralized applications, Storj and Sia for cloud distributed storage and Tezos for decentralized voting. The new distribution method is also available in the insurance field such as peer-to-peer insurance, parametric insurance and micro insurance. Banks are also interested in this new technology because it speeds up back office settlement systems. Other fields such as the collaborative economy and the iot can benefit from blockchain technology as they involve many peers to also collaborate on online voting applications. It can also be used to develop medical information systems, increasing their interoperability and safety. Several blockchains have also been developed for storing data, publishing texts and identifying the origins of digital art.