What Is Blockchain? Keys To Understanding This Technology

The Blockchain is a technology completely revolutionizing the world, from economic transactions to employment contracts or company management.

Understanding what this technology is and how it works is not very complicated. Therefore, in today’s article, we will analyze everything you need to know about this technology.

Key elements of Blockchain technology

Although initially this technology was applied mainly to cryptocurrencies, thanks to its characteristics, its use has been expanding, and it is becoming increasingly integrated with companies’ operations.

In addition, it is becoming essential to improve the efficiency and security of organizations and increase the profitability of B2B relationships.

Blockchain, also known as the Blockchain, is a set of technologies that transfer a value or asset (money, information…) from one place to another without the need for an intermediary or third parties to verify the transfer.

To understand it easily: If you want to send money to a person, as a general rule, there will be three parties: the person who receives the money, the bank that executes the transfer, and you.

However, thanks to Blockchain technology, the middleman is eliminated.

So far, everything is clear, but we will take a closer look at how this technology works to understand better what we have just explained.

How this technology works

Blockchain technology offers a new transaction authenticity system. Unlike the previous model in which a third party was necessary to verify the transaction, the Blockchain provides a network system of nodes (computers connected to the network) that, through consensus, allows information to be stored at all times securely. Transparent, thus avoiding the figure of a third party.

Each block in the chain contains encrypted information about a transaction on the network. Being linked in a chain, they allow the secure transfer of encrypted data.

To better understand how it works, we can take a very simple example: an accounting book. All inflows and outflows of money are recorded in this book. And each operation is linked to the previous one by the balance resulting from the process.

In the same way, the loss of information or operations is not possible since each transaction is linked to the others.

Although what is new about this system, as we have mentioned throughout the article, is the elimination of the figure of the intermediary that certifies the information. Thanks to the fact that it is distributed in multiple independent nodes, although they contain precisely the same information, the data can be validated without needing a third party.

It should be noted that no information found in the Blockchain can be eliminated since only new information can be added, which constitutes an added security to transactions.

Benefits of Blockchain technology in the company

The benefits offered by Blockchain for the company are almost innumerable, and it is increasingly being implemented in different business sectors. Of all of them, we highlight the following:

• Being a decentralized process, Blockchain technology helps reduce the operational risks in your organization. So financial transactions are safe and reliable.
• The data added to the Blockchain is impossible to erase or falsify since it is on a platform based on distributed ledger technology. In this way, all employees can maintain guaranteed access to information remotely.
• The added information will never be lost since it will always be recorded in the chain.
• This technology allows companies to create complete, secure, and transparent backups. In addition, you can track your company’s assets, thus reducing error margins and increasing efficiency in supply chain processes.
• These are just some elements that make this technology exciting to implement in companies. It is not surprising that already more than 33% of the companies in the world are using the Blockchain.