Blockchain (also known as “the protocol of trust”) is a distributed registration technology that aims at decentralization as a security measure. These are distributed and shared databases and records that have the function of creating a global index for all transactions that occur in a given market. It works as a ledger, only in a public, shared and universal way, which creates consensus and trust in direct communication between two parties, that is, without the intermediation of third parties.
It is constantly growing as new complete blocks are added to it by a new set of records. Blocks are added to the blockchain linearly and chronologically. Each node – any computer connected to that network has the task of validating and passing on transactions – obtains a copy of the blockchain after joining the network. The blockchain has complete information on addresses and balances directly from the genesis block to the most recently completed block.
Blockchain is seen as the main technological innovation of bitcoin as it is the proof of all transactions on the network. Its original project has served as inspiration for the emergence of new cryptocurrencies and distributed databases.
Blockchain is a type of Distributed Database that keeps a permanent and tamper-proof transaction record. The blockchain database consists of two types of records: individual transactions and blocks.
A block is the concrete part of the blockchain where some or all of the most recent transactions are recorded and once completed it is stored on the blockchain as a permanent database. Every time a block is completed a new one is generated. There are countless numbers of blocks on the blockchain that are connected to each other – like a chain – where each block contains a reference to the previous block.
The first work on a cryptographically secure block chain was described in 1991 by Stuart Haber and W. Scott Stornetta. They wanted to implement a system in which the documents’ timestamps could not be breached or retroactive. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees into the project, which improved their efficiency by allowing multiple documents to be collected in a single block.
Despite the first studies that originated the Blockchain concept to take place in the early 90s, the first blockchain network was first defined in the original bitcoin source code. Therefore, they are closely linked with respect to the emergence of both.
The original definition was created in 2008 with the publication of the article “Bitcoin: A Peer-to-Peer Electronic Cash System” published by Satoshi Nakamoto (whose real identity remains open despite some speculation and pronouncements about it). In 2009 the code was released as open source.
In 2016, an amount of US $ 1 billion was invested in investment in technology linked to blockchain, by the financial market, according to research by the newspaper CCN.
The evolution of blockchain has also made possible the emergence of distributed blockchain concepts, such as sidechain, which would allow for a greater diversity of blockchains without compromising communication between them. This is an important concept as it would prepare the network for an imminent diversification trend as different companies have been working on implementing their own blockchain.
In Blockchain, the consensus algorithm is used to solve the trust problem, that is, no data entered can be erased and all new inserts must be believed by everyone. For this, a rule (algorithm) that governs the inclusion of new data must be used.
It can only be considered that a new block has been created (mined) if it meets “also” the rule defined by the Consensus Algorithm, therefore, the new block is included in the Blockchain, making the new data public.
Another important point is that the definition of a Consensus Algorithm means that decisions about what will be inserted in the Blockchain do not depend on any centralizing entity, thus guaranteeing its independence.
There are several consensus algorithms, which can be mentioned:
PoW – Proof-of-Work: this algorithm causes competition between computers connected to Blockchain to see who will be the first to find a hash corresponding to the new block considering the difficulty imposed, making computers with more computational power are more likely to “mine” a new block;
PoS – Proof-of-Stake (proof of participation): the mining of new blocks by this algorithm occurs by voting on network participants who have “digital assets” (from the Blockchain that uses it), where the rewards and the weight of the votes are directly related to the amount of assets of each participant.
DPoS – Delegated-Proof-of-Stake (proof of delegated participation): this algorithm is similar to PoS, however participants do not directly vote on whether a block is valid or not, that is, participants vote for Delegates and Witness that they voted by they.
Several countries are discussing and passing laws to censor and protect data generated by the internet. Nowadays everything that is done over the internet can be tracked. The use of Blockchain technology can provide an anonymous and effectively decentralized internet.
In July 2018, PLC 53/2018 was approved in the plenary session of the Federal Senate, which provides for the protection of personal data and amends Law 12.965 / 16 (Marco Civil da Internet), establishing the Brazilian General Data Protection Law (LGPD). Other regulations similar to the LGPDP in Brazil are the General Data Protection Regulation (GDPR) in the European Union, which became mandatory on May 25, 2018 and applicable to all countries in the European Union, and the California Consumer Privacy Act of 2018 ( CCPA), in the United States, with its implementation based on a statewide initiative in California, approved in June 2018.
Web 3.0, maintained by Blockchain can offer a truly decentralized internet, provide anonymity and ensure privacy for users. Companies will no longer use centralized servers for data storage. Through this technology, companies can, for example, authenticate their users by their keys without storing customers’ personal data. In web 3.0, the data transferred is encrypted and the decision to share the information with platforms or third parties is up to the user.
The use of Blockchain by web 3.0 also provides less propensity to interrupt the service by running in a distributed environment, being a great alternative for applications that generate major negative impacts due to the service interruption.
BTINART is an asset that works on WEB 3.0, providing decentralization and security for its users.