Blockchain: What it is and how it works

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ESET, a leader in proactive threat detection, analyzes Blockchain, a unique record, consensual and distributed on several nodes of a network that gains more and more notoriety.

Blockchain technology originated in 1991 when Stuart Haber and W. Scott Stornetta described the first work on a chain of cryptographically secured blocks. It achieved notoriety in 2008 due to the Bitcoin and, as published by MarketWatch, for the 2022 projected an annual growth of 51% for several markets, such as financial institutions or the Internet of Things (IoT).

“Its operation can be complex to understand if it goes deeper into the internal details of its implementation, but the basic idea is simple. In the case of the Criptomonedas, it could be thought of as the accounting book where each transaction is recorded. “, says Camilo Gutiérrez, head of the ESET Latin America Laboratory.

Each block stores a number of valid records or transactions, information about that block, its link to the previous block, and the next block through the hash of each block — a unique code that would be like the block’s fingerprint. Each block has a specific and immovable place within the chain. The entire string is saved to each node on the network that makes up the blockchain, so an exact copy of the string is stored on all participants on the network.

As new records are created, they are first verified and validated by the network nodes and then added to a new block that binds to the string.

Block chain schema                                         

“As a distributed technology, each node in the network stores an exact copy of the chain, ensuring the availability of information at all times. In the event an attacker would like to cause a denial of service, it should override all nodes on the network, as it is enough that at least one is operational for the information to be available. If an attacker would like to modify the information in the block chain, it should modify the entire string in at least 51% of the nodes. “, Gutierrez explains.

Since each block is mathematically linked to the next block, once a new one is added to the string, it becomes unalterable. If a block is modified, its relationship with the string is broken. That is to say that all the information recorded in the blocks is immutable and perpetual.

 

Blockchain technology allows to store information that can never be lost, modified or eliminated. In addition, each node in the network uses certificates and digital signatures to verify the information and validate the transactions and data stored in the blockchain, which ensures the authenticity of such information.

Blockchain acts as a means to certify and validate any type of information. A reliable, decentralized record, resistant to data manipulation, and where it is recorded. The data is distributed across all nodes on the network and because there is no central node, everyone participates equally, storing and validating all the information. It is a powerful tool for communicating and storing information in a reliable way.

“Blockchain allows to verify, validate, track and store all kinds of information, from digital certificates, democratic voting systems, logistics and messaging services, intelligent contracts and, of course, money and transactions Financial. It is a technology that allows to eliminate the confidence of the equation and replace it by mathematical truth. “concluded Gutierrez.