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Bitcoin Blockchain - (BTCB)

By Juan Molina | Juan Molina | 8 Apr 2020


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A look at Blockchain and Cryptocurrencies

Before we start talking about blockchain and cryptocurrencies, it's important to know a little bit about the origin or meaning of money. Since the beginning of time, human beings have needed to exchange goods or services. Naturally, in the past, barter was used, that is, one object was exchanged for another. However, this method was not entirely fair. It was then that a consensus was created or carried out to establish the price for things and this is where the fiat or currency or, as we commonly call it, money appears.

But the currency or money, had to be backed by an object of value, gold, silver and other precious metals set the prices. This is where the banks appear. Financial entities that were in charge of keeping valuables and printed vouchers or paper money, which represented the cost of such valuables. The problem with all this is that more paper money has been printed than they really represent.

Believe it or not, one of the strongest currency or fiat we know, the dollar, has no backing in gold, silver, or any other valuable item. And then, how is it possible that the world economy is based on something worthless? The reason is that we all agree that the dollar has a value, that is, we reached a general consensus.

This is the conventional economic system that we all know and with which we have lived all our lives. This conventional system is centralized, since all control of money is held by financial institutions (which are the ones who print the money) and a few wealthy people. However, an individual named Satoshi Nakamura (who is a pseudonym since no one knows his true identity), devised a way to create digital money. Based on the blockchain and a consensus of computational strength.

The blockchain or chain of blocks is a distributed database of transactions, that means that all your information is replicated (copied) throughout the internet. There are those who compare it to a great accounting book, since it keeps the transaction log of cryptocurrencies. As its name implies, they are a series of blocks of information chained together, replicated by a whole series of interconnected nodes worldwide.

Why is it called cryptocurrencies? Because a series of cryptographic algorithms are used to create them. Cryptography is a technique that allows information to be altered or encrypted in such a way that it is unreadable by everyone else and can be transmitted by a public medium without anyone knowing what it contains, except the sender and receiver, who have the key to decipher the hidden information. This makes the cryptocurrency unique and uncopyable. Since being a digital medium, one would think that it would be very easy to make a copy of the cryptocurrency and become a millionaire.

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But where does digital money come from? Cryptocurrencies are created from the rewards obtained for generating a block of information. The act of creating a block is called mining. Normally, the mining process is carried out by computers, however, these computer equipment are designed to mine, they are not ordinary computers like the ones you use to write your documents or watch your YouTube videos. They are relatively expensive equipment and consume a large amount of energy, but generate very good income.

Blockchain technology has peculiar characteristics that make it a disruptive technology. That means that they make it unique and that it comes to change the way we see the world.

The blockchain is immutable, that is, there is no way to change what is engraved on it. Therefore, it has an indestructible character, since, in addition to not allowing alteration of the information that is stored, it is copied in multiple parts.

The blockchain is transparent, all the transaction information is available for anyone to see.

The blockchain is secure, through cryptography techniques it is possible to validate and authenticate the information that is read and stored on a blockchain. In addition, all the nodes that are part of the mining process are in charge of validating that the information is correct. This avoids the risk of duplicating digital money.

The blockchain is decentralized. No one has control over a blockchain. And it is the best of this technology, since it was designed to have a distributed nature, in this way, nobody can influence the blockchain and it is invulnerable to attacks since there is no central unit of command. The only way to destroy a blockchain would be by destroying the entire internet.

The blockchain allows you to transfer digital money from one place to another, regardless of distance, almost immediately and also for a negligible fee. Far below what a bank would normally charge and much, much faster.

The blockchain is public, that is, anyone can mine cryptocurrencies or acquire an electronic wallet to store cryptocurrencies.

Another of the peculiarities of the blockchain is that it has a programmed amount of digital money, that is, that it will only be possible to generate a single amount of digital money in total. In this way, inflation problems in this new economic system are avoided.

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Bitcoin Blockchain

The best known blockchain is Bitcoin and whose cryptocurrency also has its name Bitcoin or BTC, which was created by Satoshi Nakamura. Today it is the strongest cryptocurrency of all. Reaching the value of $ 20,000.00 per unit in 2017. It is important to note that only 21 million units or bitcoins will be created. Out of a total of 21 million Bitcoins that will be created until May 7, 2140, 16.8 million have already been mined, that is, 80% of the amount that will exist in the world have already been mined.
There are actually no minted Bitcoin coins, as Bitcoin is a digital currency. Perhaps you have seen images like the previous one. Perhaps there are projects that have coined some with commemorative motifs, but in reality they are not in circulation, they are collectible.

An advantage of cryptocurrencies is the ability to subdivide yourself up to millionths, that is, an ordinary person probably cannot buy a Bitcoin, let alone at the price of $ 20,000.00; however, you can buy a millionth of it, that is, you can buy 0.0000010 BTC.

Bitcoin is not the only blockchain and it is not the only cryptocurrency that exists. Many other blockchains exist and depend on how the blockchain is mined, or what is commonly called, the consensus method. Generally these other cryptocurrencies are also called altcoins.

Another of the best-known blockchain is Ethereum, its cryptocurrency is called Ether and its symbol is ETH. This has, in addition to all the features mentioned above, the ability to create smart contracts or smart contracts, which allows executing automatic transactions within the blockchain without human intervention. What some call smart money.

The price of cryptocurrencies is very volatile, since it is determined by the action of tradings or exchange platforms. Instability is what makes many agencies and institutions reluctant to invest in cryptocurrencies or accept this medium as an economic system.

However, there are already many sites or countries that have adopted this economic method and where this digital money is traded. In Venezuela many services and jobs are paid for with cryptocurrencies.

Blockchain technology is new and constantly evolving. Projects are continuously created where they give new uses to the blockchain, not only in the economic sphere, but also at the social and political level, areas such as: agriculture, medicine, pharmacy, logistics, government institutions, games, etc., make use of the fascinating features of this technology.

Imagine if our passport could be stored on the blockchain or our resume. No one could destroy it, nor could they change your information and you could be recognized anywhere in the world just by accessing the blockchain. In this way, people would not need to carry identification anywhere in the world. Nor would you need to carry money in your pockets since everything would be inside your electronic wallet, which would be accepted anywhere in the world. It is just a glimpse into the future, of what blockchain could become from my point of view.

@juanmolina