BLOCKCHAIN: LET’S UNTIE THE KNOTS OF CURIOSITY
How and who created the dense network of Blockchain?
Security has always been one of the main premises in favor of blockchain technology. In fact, the latter, has become the first defensive tool of this technology that now conquers more and more spaces. But…who invented blockchain technology?
Blockchain technology was formalized in 2009 with the launch of Bitcoin. However, its creator pseudonym Satoshi Nakamoto took cues from earlier technologies and proposals.
Spread long before Bitcoin, -to ensure blockchain security- hash functions are used, this language makes encrypted information an irreversible process by turning it into a long series of letters and numbers. Properly designed blockchains give the opportunity to revolutionize traditional industries and processes. However, like any creation it has advantages and/or disadvantages, Blockchain included. Let’s look at some of them:
Advantages
One of the benefits of Bitcoin is undoubtedly payments transmitted without involving third parties. By eliminating counterparties, you minimize user involvement by reducing their risks and fees.
As we mentioned earlier, blockchain is composed of a network of nodes. Thanks to the peer-to-peer network, each node in the network is able to replicate and store a copy of the database and, as a result, there is no single point of failure: a single node going offline does not affect the availability or security of the network.
Stability is another of its strengths; once blocks are confirmed and recorded in the blockchain, the data within them is extremely difficult to remove or change. This makes blockchain an ideal technology for storing financial records, as any changes are permanently tracked and recorded on a distributed and public ledger.
Thus, we can say that a blockchain system negates the risk associated with the need to trust a single organization and reduces fees and overall costs by eliminating middlemen and third parties.
Disadvantages
Blockchains are not a panacea for every problem. Because they are optimized for the benefits described in the previous section, they are lacking in other areas.
When many people make a transaction at the same time, the network works more slowly. This uncomfortable situation leads to long waiting periods because the blocks may contain a limited amount of data, and are not added to the chain instantaneously. If more transactions go through than can fit in a block, the remaining transactions must wait for the next block.
Making changes in an environment with millions of users is very difficult. While stability is one of the benefits of blockchain, it is not always a positive. Changing data or blockchain code is typically very complicated and often requires a hard fork, where a chain is abandoned to continue on a new one.
The blockchain uses cryptography, each blockchain address has two corresponding keys: a public key (which can be communicated) and a private key (which should be kept secret). Users need the private key to access their funds, which means they act like a bank. If a user loses their private key, the funds are effectively lost, and there is nothing they can do to recover them.
Despite the downsides, blockchain technology has some unique advantages, and they are here to stay. There is still a long road to general adoption, but many industries are experimenting with new applications to discover where blockchain technology can add the most value.
