What is a blockchain?
Blockchain is a technology that allows to store and transmit digital data, financial or not, in a reliable and secure way. It is a distributed database, i.e. shared in real time by all users on a peer-to-peer network, and above all without any central authority.
Each transaction, whatever it is, is written indelibly in a large transparent register that everyone can consult without ever being able to modify the previous entries. This register is made up of blocks which are themselves made up of hundreds of transactions. These blocks are added to each other forming chains, hence the term blockchain.
For a transaction to be recorded in a blockchain in a permanent way, users, then called "miners", analyze each "block" to verify its validity. These miners are paid in cryptocurrencies for each analyzed block.
How long has blockchain technology been around?
The first practical implementation of blockchain dates back to 2008. That summer, the domain name bitcoin.org was quietly registered online. Two months later, a document entitled "Bitcoin: A Peer-to-Peer Electronic Cash System" was posted on a crypto mailing list by a certain Satoshi Nakamoto, who claimed to be Japanese and born in 1975 but whom no one has ever seen. And behind bitcoin: an underlying architecture, the blockchain, serves as a public record of all transactions on the network.
But the blockchain technology itself is based on a combination of different ideas developed in the nineties. In 1991, Stuart Haber and W. Scott Stornetta described the basis of what was to become blockchain technology in an article entitled "How to Time-Stamp a Digital Document".
Why is blockchain technology so interesting?
Historically, the blockchain was intended to allow users to exchange virtual currency, the bitcoin, without going through a central control body.
Of course, the technology allows the transfer and storage of money, but it can also (and above all) replace all existing intermediaries in a transaction between two parties, and this by promising security, transparency and speed.
Its interest is based on four characteristics:
- Its decentralized system: traditionally, transactions require the approval of regulatory authorities such as a government or a bank. However, with a blockchain, transactions are carried out with the mutual consensus of users and intermediaries are eliminated, which allows for less expensive transactions. Moreover, blockchain transactions have no transaction costs.
- Reliability: the validation mechanisms behind blockchains significantly reduce errors and fraud. In order to carry out false transactions in a blockchain, it would be necessary to hack into each node and modify the databases of each of the actors. In practice, this operation is impossible.
- Transparency: since a blockchain is accessible to everyone, all transactions can be consulted in real time by all users in an authentic and secure manner.
- Its immutability: once a transaction is added to a blockchain, there is no going back. It will be registered in the register, without any possibility of going back on it. This facilitates the establishment of a climate of trust between the members of the network.