What about this “Blockchain” thing…?
You have probably heard about Blockchain. It seems to be everywhere. All the media outlets are talking about it, the big companies are jumping into it and the governments are stepping in. Everyone is trying to put the target on Blockchain.
Why is that? Will it change our lives? We believe it will.
This is the new big thing. Partial and one-sided knowledge appears to be on the rise, but there is still a vague picture of why and how this technology could prove to be one of the greatest game-changing innovations in the coming years.
As much as the internet, Blockchain has the potential to disrupt all of our existing industries. And everyone is starting to notice. But, what is it?
Blockchain is a promising governance technology that aims to resolve many of the inefficiencies of our current transactional system (primarily based on the internet). With it, current problems such as the lack of transparency along the supply chain of goods, services, and financial payments or the fact that we have no control over what happens with our private data can be improved.
In simple terms, Blockchain technology is a record-keeping tool. It is based on the idea of the traditional accounting system where there is a centralized ledger recording the transactions. However, the Blockchain upgrades this system making it more honest and consistent.
Within the Blockchain, the ledger is decentralized because it is distributed among a network of computers. Thanks to this structure, there is no hierarchy, and all the transactions are managed by the different computers acting as the ledger.
With this technology, a global network managed by people who mostly do not know each other is enabled by an underlying consensus that incentivizes all the network actors with a native token as a reward for confirming the transactions taking place within the chain.
The Blockchain works through a permanently growing list of records called blocks. It is interconnected because each block contains the cryptographic hash of a previous block, a timestamp, and transaction data.
The Blockchain is a sequence of blocks, each of them charged with the history of all the previous transactions´ records and the new transaction information.
The Blockchain uses cryptographic principles to attach every block to another, making all the information secure and encrypted.
To add a block to the chain, a new transaction needs to be approved. As mentioned before, all the transactions happening in the Blockchain are verified by the network of computers, working on a peer-to-peer basis.
The network approves all the new records taking into account the information already contained in the existing blocks. Thanks to this structure, several computers have to approve the accuracy of the information, creating a confirmation system with multiple layers acting within minutes.
Peers of a blockchain network reach a common agreement about the ledger’s state by the use of consensus algorithms, where thanks to the Proof of Work, one of the network participants is elected as a leader if he finds the solution to a particular mathematical problem. The elected leader will decide the contents of the next block.
When a block is added to the Blockchain, we understand that the block is mined. As explained, the miner will get a native token as a reward to give an incentive to those participating in the transaction´s processes.
In Proof of Work, other nodes check the block’s validity by checking that the hash is accurate. Hashes are used to verify data. The hash of each transaction is generated to include information from the current and past transactions. Every mined block contains the hash of the previous block, which contains the hash of the previous block, and so on.
This is the reason why a blockchain is considered immutable: modifying any information in a block would automatically change the hashes of every block after it and would be rejected by the network.
Moreover, the data on the Blockchain is transparent, thanks to the Public Key Cryptography. This refers to a pair of keys –one public and one private– used to prove that transactions were indeed sent by a specific account and not manipulated.
The private key needs to be secret, and the public key can be shared with anyone. A message can be signed using the private key resulting in a signature. This signature can then be verified using the public key to prove that the message was, in fact, signed by the corresponding private key.
After a block is added to the blockchain, all the encrypted information is downloaded onto each computer. That is why the Blockchain does not have a central authority. There is no single place where the data is stored since it is collectively owned by all the network.
In a nutshell, this is how these thousands of computers, distributed worldwide, keep the blockchain secure and running. All the information is open for everyone to see and it can be downloaded to verify the hashes.
The Blockchain remains secure thanks to its immutability. All the protocols previously explained make the system incorruptible. Additionally, all the hashes are encrypted, protecting the data stored inside the chain.
The distributed architecture prevents all of the information stored from being compromised at the same time. Given that the Blockchain does not have a central authority and request for consensus algorithms, the system is hardly hackable. If someone hacked into one of the computers participating in the network, this would not affect the encrypted data saved on the Blockchain.
To hack the Blockchain, one would need to break into multiple computers worldwide, simultaneously, and open their encrypted directory to breach them. Although this is feasible, the resources to do it are high enough to deter any intent.
On the contrary, the systems we use today are predominantly built on the idea of the stand-alone hardware. The Blockchain reinvents the way data is stored and managed.
That is why we believe the Blockchain offers plenty of possibilities. Our White Label solutions use the best standards offered by the most secured Blockchains to optimize every growth strategy of our clients.
Within the Financial Industry, we are able to offer outstanding instruments capable of cutting those middleman players that make the processes more complicated and inefficient.
Considering that individual units of assets like (shares, real estate, art, CO2 certificates, money, etc.) can be fitted with the Blockchain code, these assets can be passed along from one person to another with little to no transaction costs and fewer intermediaries.
This concept refers to Tokenization. Using adequate standards, these transactions can be automated following the corresponding regulatory requirements, in order to open new markets to a global base of investors.
Our White Label Enterprise Solution take the best of the Blockchain Distributed Ledger Technology to make its advantages available to all financial players.
We offer growth opportunities for the leading business of tomorrow.
micobo is committed to offering excellent products and services capable of empowering all financial players with the best tools using the leading technology of the future.
Contact us now to request a demo of our platforms and partner with one of the leading FinTech providers in the Blockchain sphere.