The most revolutionary technology since the advent of the Internet has been called. It can dramatically change our daily lives. With the potential to replace all intermediaries and agencies.
To clearly understand what is blockchain and what the benefits are, it is important to know how monetary transactions currently work. Although cash still plays a critical role, over the years we are moving from cash to digital payment.
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“Blockchain technology provides a way for people or authorities who don’t trust each other to agree on a common digital story. A common digital history is important because digital currency and transactions are, in theory, easy to copy. Blockchain technology solves this problem without the need for a trusted intermediary or agency. “
Perhaps too abstract if you get this immediately on your choice. Let’s go back to the example of Maria who wants to transfer 5 euros to Juan. Who will verify that Maria does not secretly grant those 5 euros to another person as well? It has taken years before a better solution and alternative to expensive banks appeared, but finally, blockchain technology has arrived.
The blockchain ensures that the € 5 transaction is automatically added to a global ledger where all transactions are kept. Subsequently, it is also verified if this transaction is valid. There is no need for an intermediary to follow up, everything is done automatically by the blockchain and the computers that keep it running (miners). But how exactly does this work?
Going back to the previous example but altering the delivery method, Maria sends Juan the 5 euros through the blockchain. This is presented online as a “block” (or block). This block contains all the information about the transaction, such as the value (5 euros), the time it was sent, who it was sent to, who it was sent to, and so on.
At the moment, Bitcoin is by far the largest and best-known blockchain app, however Ethereum, number 2 right now, is on track to overcome that edge. Ethereum is mainly known because it focuses not only on blockchain as a transaction tool but also on the configuration of smart contracts. But what exactly is a smart contract?
To start, here is the definition of what a smart contract is:
A smart contract is a programmed contract whose agreements are registered in code on the blockchain. The contract is automatically executed without the need for trust in the intermediate parties. These quotes can always be viewed, but can never be adjusted again.
These contracts are drawn up and programmed by programmers and we do not have a contract with Smart contracts, but with a digital contract consisting of computer code. This code contains all the information about the contract: who is it valid for, when should it be executed, when has this agreement been registered, etc.
What advantages do smart contracts have over normal contracts?
Of course, a smart contract not only has advantages, but it is also important to consider the disadvantages that it entails.
As we can imagine, blockchain technology is expected to have a major impact on our daily lives. It has the potential to completely replace banks, notaries, attorneys, and many other intermediaries and parties. The last time people were so positive about a technology was when the Internet was on the rise and we know how much influence it has had and continues to have.
We can understand that the blockchain is a data structure in which the information is grouped together called blocks. These blocks are stored following a timeline and in encrypted form on computers known as nodes. This information is kept safe in them, it cannot be deleted or modified.
Also Read: A Deeper Look Into Blockchain
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