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Blockchain: what it is and how it works – simple explanation

Technology is advancing faster and faster and gaps into our daily lives without hardly realizing it. Would you have imagined a few years ago that people would read the news on the mobile, instead of in the newspapers? Would you have thought about the possibility that everyone could be connected through the Internet?

These advances, although they are a bit weird at the beginning, have no turning back. And that is what is currently happening with the Blockchain. Surely you will have heard about it, a technology that uses bitcoins (virtual currencies or cryptocurrencies) to work. If you do not know what we are talking about, do not worry, because in this article we will talk about the Blockchain: what it is and how it works. Do not miss it!

What is blockchain?

The Blockchain or blockchain was created in 2009 at the same time as bitcoin (a virtual currency). It is a publicly accessible database where all transactions that are carried out within the platform are recorded.

To access Blockchain, you only need a computer or a mobile. That is, these operations do not go through any bank or other central authority, so there are no intermediaries. It consists, then, in a kind of digital book of public access and decentralized accounting.

How the Blockchain platform works

Blockchain technology works, as we said, with a system without P2P intermediaries, that is, peer-to-peer, or what is the same: peer network, peer network or peer network.

When transactions are made, blocks are created that prevent their alteration when they are published, which appear in chronological order in which they were made. This is possible thanks to cryptography, a mathematical system that makes it impossible for someone to use other people’s bitcoins. One of the ways you can make this possible is to add a password to virtual wallets (or bitcoin wallets) to make sure that only its owner has access to it.

How to use Blockchain

To start using Blockachain, you just have to go to their website and follow the steps below:

  1. Create your own user profile by giving “Get a free wallet”, that is, “Get a free wallet”.
  2. There you will have to enter your e-mail and a password of your choice.
  3. Once you do, a bitcoin address will be generated, but you can create others when you need it.
  4. Then, you can ask your friends or family bitcoin address so you can make payments.

How to get bitcoins

Once you have your Blockchain account created, you will only need bitcoins to start using it. There are two main ways to get bitcoins:

  • Buy bitcoins: you can buy them from your friends or people close to you, or do it more directly in the so-called “exchange houses”, where through your bank account you can exchange real money for its equivalent in bitcoins.
  • Accept bitcoins: another option is to accept them as a method of payment for goods and services performed.

What is bitcoin mining

Bitcoin mining is a mathematical process carried out by specialists in the sector, the so-called “bitcoin miners.” These professionals are responsible for increasing the security of your transactions by confirming that they are made and carried out properly.

As a form of payment for their services, bitcoin mining specialists are paid a small percentage of the cost of the transactions they confirm.

Currently, bitcoin mining is a very competitive sector and does not give great economic benefits.

The blockchain infrastructure

But this is not all, because the Blockchain infrastructure serves many more things apart from to exchange bitcoins. Many more projects are currently being created to be implemented in the Blockchain platform, such as the following:

  • Ethereum: This is a non-profit organization created by a 21-year-old Russian-Canadian. In his project he wants to develop his own cryptocurrency, called “ether.” Ethereum would be much more than a virtual currency, since the idea is that it can be applied to various programming languages. However, his project has detractors, since they say that the Blockchain system would go from simple to complicated, which in the long run could be a problem.
  • Ripple Labs: this is another project based on micropayments, where transactions would be carried out quickly, safely and easily, but also would not have to be done with bitcoins. However, this project has also received criticism for not being such a decentralized project, which has led to a freezing of approximately $ 1 million of user funds.

It is logical that something as striking as the Blockchain platform leads many to try to create their own projects or even take advantage of the operation of Blockchain. However, for now, only Blockchain and bitcoins are in perfect working order.

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