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Blockchain, understanding it, is not that difficult since this concept is increasingly used. We will try to guide you, to explain what it is, how it works and what is the revolution that the chain of blocks poses.
It is a paradigm shift in our understanding of the digital world. A gigantic account book in which records (blocks) are linked and encrypted to protect the security and privacy of transactions. A distributed and secure database (thanks to encryption) that can be applied to all types of transactions that do not necessarily have to be financial.
This account book is not only distributed and is secure: the blocks are linked and have a hash pointer (encoded) that links them to the previous block, they also have a time stamp and the specific data of the transaction and also that information is public. What does that mean? It means that the chain of blocks, although it protects the privacy of its users, it does allow to control the traceability of those transactions, or what is the same: it allows to know the whole path that for example a Bitcoin has followed since it´s inception up to the wallet that belongs to someone. The design of the blockchain itself has clear advantages, and for example it confirms that each unit of value (for example, each Bitcoin) has only been created once, which avoids the traditional problem with the double spending of digital currencies or with false money, which reduces the confidence of users in that currency and also in the circulation of it.
The blockchain, as its name suggests, is a chain of blocks. Each of these blocks contains the encoded information of a transaction in the network. Before, we used the analogy of the accounting book, where we noted, for example, that A went out and B entered. Well, blockchain behaves the same way, but it will be the network of distributed nodes who have to certify that these data are true. How do they do it? Each block of the chain carries the package of transactions and two codes, one that indicates which is the block that precedes it (except the source block, of course), and another for the block that follows it, that is, they are interlinked or chained so they are called hash codes or pointers. Now comes into play the concept of mining performed by the nodes, that is, the process of validating information. In this process of mining or checking, when there are two blocks that point to the same previous block, it simply wins the first one to be decrypted by most of the nodes, that is, that most points in the network must agree to validate information. Therefore, although blockchain generates multiple blockchains, the longest chain of blocks will always be legitimized.
Decentralization: This is the main feature of the Blockchain. It´s where the chain of blocks comes in, which basically eliminates intermediaries, decentralizing all management. The control of the process belongs to the users, not the banks or a Central Institution, no one has control of the blockchain or the account book, it is controlled by all the users. This example can be extrapolated to other types of transactions, and it is they who basically become part of a huge bank with thousands, millions of "nodes".
All this becomes a tremendous novelty, this transfer does not require a centralized intermediary that identifies and certifies the information, but it is distributed in multiple independent nodes that register and validate it without the need for trust between them. Once entered, the information can not be deleted, only new records can be added, and will not be legitimized unless most of them agree to do so. Even if the network were to fall, with only one of those computers or nodes not doing so, the information would never be lost or the service, depending on the case we are talking about, would still work. Hence the importance of Decentralization.
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