“A blockchain is a digital ledger that is distributed across multiple locations to ensure global security and ease of access, allowing consumers and suppliers to connect directly, eliminating the need for a third party.”
Let us break this definition down into parts:
A blockchain is…
…a digital ledger”
Like a computer database, a place where things are written, simply: letters, numbers and programming code.
…which is distributed among several locations”
It is not owned by just one person but is copied in the same way on many computers at the same time, connected to each other via the Internet. A change in one of them affects all the others in real time.
…to ensure global security and ease of access”
Uses cryptography to keep digital exchanges secure (e.g. exchange of currencies or contracts), changes in the blockchain must be approved before being registered and everyone can see it.
…allowing consumers and suppliers to connect directly, eliminating the need for a third party.”
Eliminates intermediaries by allowing two parties to connect or exchange value with each other without external approval.
Why is so revolutionary?
Technology can work for almost any type of transaction involving value, including money, goods, and property.
The ability to use a blockchain that records all information related to a particular transaction in real time and between multiple parties is incredibly powerful.
The applications for automating business processes, particularly in terms of payments and controls, are endless.
Its potential uses are almost unlimited: from collecting taxes to allowing immigrants to send money to their families in countries where access to banks is difficult.
Blockchain also helps reduce fraud because every transaction would be recorded and distributed in a public ledger so anyone could see it.
And now, let us go a little deeper into its operation and technical details:
What is Blockchain?
When the term ‘blockchain’ appears in someone’s life for the very first time, his or her mind could automatically separate it in two words: ‘chain’ and ‘block’.
Probably we analyze each one separately and then put both mental images together to have something clearer about the term.
When we speak of a chain, we can think of a bicycle chain or chains for the wheels of the car. In any case, they are a series of interlinked elements.
When we talk about ‘blocks‘, a concrete block or even the typical small Lego blocks can come to mind. In a very basic way, something square or rectangular that has a specific function.
If we put the terms together again after this little analysis we could imagine blocks linked to other blocks by the use of a chain.
In any case, it comes very close to the main idea and we would simply have to digitize it.
In the case that each block contains computer records and these are put one after the other, one could say that a blockchain looks quite similar to a database, and more or less is kind of true.
However, it is not a normal database, as for example a Microsoft Access document. It is rather a database distributed in several parts, that is, a set of mini-databases related to each other put one after the other in chronological order.
In addition, the Blockchain is not in one place, such as in a single computer or hard drive, but many individual computers form the platform and interact constantly with it.
Confusion in terms
Being such a novel technology, the term ‘Blockchain‘ is used in many cases for totally different things and this makes it very confusing.
Sometimes the expression is used to refer to Bitcoin itself, which is wrong. Bitcoin was the pioneer in using this technology but today it has no exclusive character. Other platforms also use Blockchain apart from Bitcoin.
In other cases, this term is used to refer to cryptocurrencies in general, but once again this is not true either. Cryptocurrencies are just one of the many platforms that use Blockchain technology, therefore, although both have a certain relationship, they are not similar.
It also comes to relate to smart contracts and decentralized applications (ÐApps), but just as we have commented regarding cryptocurrencies, smart contracts and ÐApps are only possible applications that use blockchain, not the blockchain itself.
However, from all the terms with which this technology has been defined, the one that seems most accurate is ‘Distributed Accounting Technology‘ (DLT). Yes, we know these are new and confusing terms, just keep reading to the end to understand it all.
DLT refers to a list of transactions shared in real time between several computers, rather than on a central server.
By allowing information to be distributed in real time rather than copied – as it used to be until now – Blockchain technology brings us the basis of a new reality.
This technology is starting to demonstrate its effectiveness and potential to bring about massive change in existing industries such as banking and finance.
With the evolution of the blockchain, individuals will have direct control of their assets and will not need a costly middleman, but will reward each other for acting with integrity.
The central idea is to put your trust not in a single entity such as a government, a bank or a multinational company, but in the network itself and in each of its participants.
Blockchain is a technology that, like your iPhone or computer, does not need to be understood, but used.
Most people do not know or understand the technology that makes the smartphone camera trigger when you put your finger on the ‘Camera’ app, or the computer pointer moves when you move the mouse.
We simply use the technology that changes us and makes our lives easier without knowing how it works.
However, below we will explain in depth and in detail this tool considered by many as revolutionary.
Once we understand that the Blockchain is simply some blocks of information put behind others, let us look at its properties below to understand how this so simple is really something so special:
Peer-to-peer -P2P- replication
The act of replicating refers to the act of duplicating something. For example, when we get the flu, we can spread it to everyone close to us, they can spread it on to more people, and so on. In other words, the virus reproduces by creating equal copies of itself, i.e., the virus replicates.
On the other hand, in computing there are so-called p2p networks.
These networks are a set of computers connected to each other -called “nodes”- in which the direct exchange of information is allowed, without the need for that information to pass through a central server first.
Examples of these networks are applications such as UTorrent, Ares or BitTorrent in which people share their own files with other users.
The blockchain works like a peer-to-peer network, being the same at the same time in all computers that are part of the network.
Each user that is part of it will have a complete and updated copy of the whole blockchain. When information is added to it, it will also be synchronized in the rest of the computers of the participants.
Unlike banks or government entities – centralized systems – the blockchain works through a decentralized system. This means that the network works from one user to another -on an equal footing- without a central entity that controls the data traffic in the network.
According to Vitalik Buterin, creator of Ethereum:
“Blockchains are politically decentralized (no one controls them) and architecturally decentralized (no central point of infrastructure failure) but logically centralized (there is a commonly agreed state and the system behaves like a single computer)”.
A worldwide network of computers uses Blockchain technology to jointly manage the database that records the platform’s transactions.
That is, the platform is managed by its entire network, and not by any central authority, working as Buterin says: as a single computer.
If I send an email to a large list of friends, I might consider that data immutable.
If I wanted to change that data, I would have to persuade my friends to delete the email (or persuade people who manage Gmail, Outlook, or any other email service).
From the point of view of the control we have, that email is immutable – I cannot undo it without collaboration and the risk of getting caught.
So the immutability is relative, and it is related to how difficult it is to change something.
In the blockchain the same thing happens as in the previous example:
Once a piece of data has been recorded or a transaction has been made, it is impossible to delete it, or rather, it is extremely easy to realize that someone is trying to modify some information.
It could only be canceled if the rest of the participants agreed with the modification. That is why it is often said that this technology is irreversible and immutable, in other words, that there is no practical way to roll back and change or edit any data that has been recorded in the blockchain.
Cryptography and security
Cryptography is the technique of encoding information with secret keys, in such a way that what is written is only intelligible to those who know how to decipher it.
Let us go with a more practical example: let us say we have the message “Ethereum will revolutionize the future” and we want to encrypt it so that nobody knows what it is.
For this, we propose a private key, a rule: that each letter of the message is replaced by its next letter in the dictionary. This would leave us the message “Fuifsfvn xjmm sfwpmvujpojaf uif gvuvsf”.
This message to anyone is unintelligible. However, if we give someone our private key to decrypt the message (the ‘rules’), they will be able to read the original phrase.
In the blockchain, the network can verify that a transaction was sent by the person who holds the private key without that person revealing his or her identity. This brings us levels of security at the level of military computer security and all this is possible thanks to cryptography.
In a public place such as a bakery, anyone present can see what kind of bread customers choose.
The public nature of the blockchain means that transactions and block validations can be seen by each and every participant in the network.
Privacy and transparency
Although the blockchain is public, and therefore transparent, it does not mean that there are no certain levels of privacy.
There is an inherent balance between transparency and privacy. A fully transparent system allows anyone to see any piece of information, that is no privacy is provided. Similarly, a fully private company provides almost no transparency.
However, a system can still provide important privacy guarantees while making transitions transparent, as in the case of blockchain.
This technology provides public verifiability of its general state without filtering information about the state of each individual participant.
Privacy in a public system can be achieved using cryptographic techniques, but usually less efficient.
Ethereum, through the zk-Snarks cryptographic protocol (from the Zerocash platform), provides complete anonymity while still providing sufficient transparency to publicly verify the status of the blockchain.
Although we would like it to be so, integrity is not a quality practiced by all people today. There are still many people who seek to ” trick ” others for their own benefit, which is contrary to integrity.
In the blockchain, in order to be able to “cheat” the rest of the network, it would be necessary for the rest of the network to accept it.
For example, if someone wanted to perform or modify a transaction for malicious purposes for the rest of the network.
The rest of the nodes would have to agree and validate that modification. If the majority of the platform is honest, they will reject any invalid transactions from that user, and focus on valid transactions from other honest users.
In other words, the effect a dishonest person or group of people can have is very limited.
To summarize, this technology makes acting dishonest not only useless but also unprofitable. Blockchain induces the integrity of network participants.
When a company has a guestbook, each visit must record its name, the time when arrived at the place and the time when leaves.
In this way, you have a temporary and chronologically control of the visits.
The temporary stamping that the blockchain has with it is the process of keeping a secure record of the time of creation and modification of the data. It allows interested parties to know, without a doubt, that a document in question was created at a specific date and time.
In the blockchain, each block has a time stamp that adds this temporary record to all transactions in that block.
Speed at a low cost
Blockchain makes it possible for transactions to take place more quickly than through a central institution such as a bank. By being able to carry out more transactions, in less time and directly between interested parties, without intermediaries, the whole process is speeded up.
Directly, it also influences the costs of maintaining the blockchain: if intermediaries are eliminated, this cost is also eliminated and the process of carrying out transactions on the network becomes cheaper.
Types of Blockchain
Blockchain types can be classified differently depending on whether it is a function of data access or a function of permissions.
According to the access to the data: public and private
Public blockchain are those in which there are no restrictions to participate, both in the reading and in the writing of their data.
They are transparent and carefully constructed to work in an environment of limited trust.
In contrast, private blockchain are those in which both the writing and reading of data are limited to a predefined list of known and trusted participants.
These two types of blockchain are practically opposite. However, there may be cases where there are blockchains with characteristics of both types simultaneously, creating a kind of fusion between the two.
According to the permissions given: with permissions and without permissions
Permitted blockchains are those in which the task of processing transactions is carried out by a list of known participants. Therefore they generally do not need native tokens.
On the other hand, permissionless blockchains are those where there are no restrictions on processing transactions and creating blocks. Such blockchains need native tokens to provide incentives to users to maintain the system.
Blockchains could be created that are combinations of the four types mentioned above, such as private with permissions, public with permissions or public without permissions (it is not possible to create private blockchains without permissions).
Ethereum and Bitcoin are cases of permissionless blockchains.
Updates in the blockchain
All technology undergoes changes and updates that are given over time.
Sometimes these changes are programmed following a planned roadmap from the beginning so that other users are already informed of these settings and accepted them since they decided to join the network.
In Ethereum, these changes would be those carried out with the updates of its protocols through the so-called ‘four phases’: Frontier, Homestead, Metropolis and Serenity, the latter still to come.
On other occasions, these changes are made through proposals that help improve the platform, which are voted on, approved -or rejected- by users and introduced -or not- in the next update.
There are also cases in which changes in the platform are forced by discrepancies between the users of a network.
In a private network where a group has control over updates, this is an easy problem to solve. Without going any further, with a message like “Everyone must upgrade to the new version by July 31”.
However, in a public and decentralized network such as blockchain, this problem is more complicated, as it depends on the consensus among the majority of participants. If there is no consensus, there is division in the blockchain, and if this division occurs it means that there is a bifurcation in two chains of similar but different blocks.
This bifurcation is called Hard Fork.
A Hard fork consists of drastically changing the protocol on which the blockchain is based. Saying in a different way, changing the rules under which the platform is governed.
It is a method of updating the blockchain that is:
Not compatible with previous versions
Definitive, this is impossible to go back
Serves to create a permanent divergence in the blockchain
This Hard fork requires all network participants to update to the new version, since the old version will no longer be compatible with the new one. In this way, whoever stays in the outdated version will be processing transactions and blocks that will be invalid and will not be added to the blockchain.
This will happen as long as the old version does not have enough support from the community
If the older version still had people committed to the initial cause and were against the upgrade, this hard fork would produce a complete bifurcation, thus giving a new chain of blocks, with their respective cryptocurrency, which would maintain the same rules that existed before the Hard fork and which would raise a new roadmap with a different development plan to the new blockchain.
That is to say, the Hard fork could divide a project based on a blockchain, in two different projects, with two different blockchains and two different cryptocurrencies.
This that we have explained and that we have exposed graphically in the previous image already was given, without going further, in the Ethereum project.
Specifically in ‘The DAO hack‘ in which a hacker stole 50 million dollars in Ether for a failure in the code. After that happens, the Ethereum community debated whether to continue the same despite the theft (they argued that “the code is the law” and should not be altered) or modify the code with a Hard fork to recover lost funds.
Ethereum Classic Logo
Most of them finally chose to make a Hard Fork, although that did not make the old blockchain disappear. Many people decided to continue with the original blockchain and the platform was divided between Ethereum and Ethereum Classic, with two different cryptocurrencies: ETH and ETC.
As we said before, a Hard Fork symbolizes a radical change, and this can be a “restart”, which can carry certain risks. There can be errors in the code that can be exploited by hackers.
For example, there could be a so-called “repetition attack” whose function is to dishonestly repeat the transmission of data. In the case of cryptocurrencies, the hacker would take advantage of the existence of two blockchains to reproduce the same cryptocurrencies in both chains, in order to spend them several times.
It could also be the case that this Hard fork is done accidentally and only considers valid the new blockchain created, eliminating all of the above. This could leave many users without their funds.
Bitcoin already suffered in 2013 this process, which it could be solved returning to the previous version to the Hard fork.
Soft fork is a temporary divergence in the blockchain caused by non-updated nodes that do not follow the new consensus rules.
It is a software update method that is compatible with earlier versions of the blockchain.
With the Soft fork, the original blockchain contains non-updated node blocks, but also accepts blocks generated by the updated nodes. Meanwhile, the new bifurcated blockchain contains blocks processed only by the updated nodes that accepted the Soft fork.
As soon as the Soft Fork is implemented, a time margin of “X” blocks will be given for the network nodes to update to the new rules. If at that “X” block number the majority of nodes in the network have been updated, then Soft Fork will success and consensus will be given to implement the new rules officially, making the old blockchain useless.
On the other hand, if when the “X” number of blocks is reached, the majority does not update, the Soft fork will fail and the original blockchain will continue unchanged.
In the case that a Soft Fork go forward, once the new rules are accepted and implemented, the participants (miners) who do not want to update will be in the situation of validating useless blocks with no possibility of reward.
EIP (Ethereum Improvement Proposals)
As we have already seen, Hard fork or Soft fork processes bring with them new protocols, this is new consensus rules within the platform.
Before reaching these processes, these new rules have to be proposed to the rest of the community, either by the project’s development team, or by network participants or other users.
These proposals are called “Improvement Proposals” and describe the standards that are carried out within the platform. The improvement proposals in Ethereum are called EIP -Ethereum Improvement Proposals- and in Bitcoin they are called BIP -Bitcoin Improvement Proposals-.
An EIP is a design document that provides information to the Ethereum community, or that describes a new feature for Ethereum, its processes or its environment.
The EIP must provide a concise technical specification of the feature you want to add to the platform and a justification for it. The author of the EIP is responsible for creating consensus within the community for it to be accepted.
Either in Bitcoin, Ethereum and other crypto currencies, the proposals are written, detailed and discussed through the Github site, a development platform where you can host and review code, manage projects and create software together with other interested developers.
The process to follow is to fill in a written EIP template through the Github portal, detailing it to the maximum so that it can be studied and debated by the rest of the network participants.
If there is a consensus of the participants in favour of this proposal, it will be introduced in the next Soft fork / Hard fork.
ERC (Ethereum Request for Comments)
An Ethereum Request for Comments (ERC) is a memorandum written by engineers and computer scientists describing methods, behaviors, research or innovations applicable to the performance of Ethereum.
Seen in this way it is quite similar to an EIP, with the difference that the EIP is a proposal to improve the system in a technical way, and the ERC is created to communicate new concepts for possible future improvement.
This has become a kind of official document to specify information of Ethereum, its protocols and its procedures.
It is not directly related in an update, but it is passively connected.
An example of ERC is the ERC-20 standard through which many of the cryptocurrencies and tokens that are listed in the markets were created.
Present and future uses of Blockchain
After an in-depth general review of everything related to Blockchain, let us move on to show the uses that this technology can have at present and will have in the future.
Traditional systems tend to be cumbersome, error-prone and madly slow. Intermediaries are often needed to mediate the process and resolve conflicts, adding an extra cost of time and money.
On the other hand, users find the blockchain cheaper, more transparent and more effective, since the trust is not placed in a third party, but in each node -participant- of the network.
These nodes are responsible for recording and verifying the data of each transaction that occurs within the network. These registers are permanent, exhaustive and public, which makes users feel financially secure.
Not surprisingly, a growing number of financial services are using this system to introduce innovations such as smart bonds and smart contracts.
Here are some examples of financial services within the blockchain:
In their simplest form, cryptocurrencies are electronic coins that only live within a digital network such as a blockchain. Some of the best known are Bitcoin, Litecoin, Monero, or Dogecoin.
The fact that they are decentralized means that there is no entity that controls their production or the transactions carried out with them. The control resides in the users of the currency itself, that is to say, of the whole network of that cryptocurrency.
The value of it will depend on how many people are interested in using it: if a majority sees benefits in its use, they will be willing to use it and its value will rise. On the contrary, if a majority is not willing to use a cryptocurrency, its price will decrease.
Asset Management: Processing and Settling Business Transactions
Traditional business processes for asset management can be costly and risky, especially when dealing with cross-border transactions. Each part of the process maintains its own records that create significant inefficiencies and margin for error.
Through blockchain, not only is the error reduced by encrypting the records, but the process is simplified and the need for the already mentioned intermediaries is eliminated.
Insurance: claims processing
The process of reporting to an insurance company can be very frustrating and ungrateful.
Between companies and policyholders there are many cases of fraudulent claims, abandoned policies and a lot of small print in the contract that end up taking the process through the courts. The margin of error is enormous.
The blockchain provides a perfect system for risk-free management and transparency. Its encryption properties allow insurers to capture ownership of the assets to be insured.
As an example, it would be like applying a unique barcode to each insured property and storing it in the blockchain so that there will be no problems in the future.
The global payments industry is error-prone, costly and open to money laundering. Making a payment from one bank to another on another continent can take several days, with the resulting delays and problems it can cause.
The blockchain is already offering solutions to this problem with remittance companies such as Abra, Veem y Bitspark offering end-to-end global services powered by the blockchain.
In fact, in 2004 Santander Bank became one of the first banks to merge the blockchain into a payment application, allowing customers to make international payments 24 hours a day.
Tangible properties -such as automobiles or houses- and intangibles -such as patents, property titles or company shares- may have smart technology built into them. This technology causes each property to be registered to an owner, and such registration can be stored in the blockchain.
In this way, the property is included in the blockchain along with contractual details so that others can make use of that property. The blockchain allows the rental or sale of that property once the contract is verified.
Making a property smart and registering that property in the blockchain decreases the risks of incurring fraud and mediation commissions among others. At the same time, it increases trust and efficiency.
This smart property technology has its greatest exponent in the idea of the Internet of Things (IoT).
Internet of Things (IoT)
We can call any material object “thing”. If we look around us we are surrounded by “things”: the mobile phone, the game system, the television, the car, our clothes… everything.
Many of these things can be connected to the Internet nowadays. Before you could only access the Internet through a desktop computer connected to the network, then it also became possible through a laptop.
Technological advances succeeded in creating devices smaller than a laptop, with an Internet connection, such as PDAs (Personal Digital Assistant), which were replaced by smartphones.
Later on, another device emerged that was somewhat larger than the phone that could also connect to the Internet: the tablet. And after that, endless “things” can connect to the Internet today: from a car or a fridge to a house. This is what we know as the “Internet of Things”.
The Internet of Things (IoT) is the network of physical devices, vehicles, appliances and other items integrated with electronics, software and Internet connectivity that allow them to interact with each other and exchange data.
Every “thing” within the network is uniquely identifiable through its integrated computer system, can be controlled remotely and is able to interoperate within the existing Internet infrastructure.
When sensors are added to these Internet-connected items, the IoT technology becomes an example of real-life automation. An example of this would be the car that brakes only when its sensors detect that a person is in front, or also when the position lights are turned on automatically as the day gets dark.
These devices collect this useful data with the help of various existing technologies and then share this information autonomously among other devices.
Imagine the situation of a typical motorway tunnel where it is necessary to switch on the position lights when entering it.
If an intelligent car enters the tunnel and the driver turns on the position lights and turns them off when leaving the tunnel, this information is collected and shared on the network. If this is done by all intelligent cars, a pattern is created in which, when the cars reach that specific tunnel, they switch on the lights when they enter and switch them off when they exit.
This data is collected, shared on the Internet and will make the cars, when they reach that tunnel, turn on the lights when they enter and turn them off when they exit fully automatically. In other words, they will make the smart car “learn” what all cars do and put it into practice autonomously.
This is already a reality today, and the case of the car is just one of many that exist. In the near future, some examples of this would be a printer that could automatically order ink cartridges from Amazon when it is running out or have the coffee maker start making coffee when the alarm clock goes off.
On a larger scale, cities and governments will be able to use IoT to develop cleaner environments, more efficient use of energy and create the so-called “smart cities” to improve the way we live and work.
As a matter of fact, experts estimate that, at the rate this technology advances, by 2020 the network of objects connected to the Internet will consist of approximately 30 billion.
We cannot avoid the idea that, where there is a device connected to the Internet, there is a hacker trying to take advantage dishonestly. With billions of devices connected to each other, cybersecurity experts are concerned about possible chaos, insecurity and fraud.
However, this is where Blockchain technology comes in.
If we put all these intelligent properties together and register them in the blockchain with all the information that each of the devices registers day by day, the problems of chaos, insecurity and fraud will vanish by themselves.
Blockchain provides security to this ‘Internet of things’ and reduces human intervention through automation. And this automation would not be understood without smart contracts.
Personal health records could be encrypted and stored in the blockchain with a private key that would only allow access to certain individuals.
The same strategy could be used to ensure that investigations are conducted in a secure and confidential manner.
Like personal records, receipts for surgeries could also be stored in the blockchain and sent automatically via smart contract to insurance providers as proof of delivery.
Another use of blockchain in the healthcare environment could be for the general management such as supervision of prescription medicines, regulatory compliance, monitoring of test results, and management of healthcare supplies.
The key issues in the music industry are often the ownership rights and distribution of royalties.
The digital music industry focuses on monetizing productions, while property rights and royalties are often very easily overlooked by, among other things, piracy.
Blockchain technology and smart contracts can solve this problem by creating a complete and accurate decentralized database of music rights.
At the same time, through the blockchain, the transmission of artists’ copyrights and real-time distributions to all those involved in the labels would be done in a secure and transparent manner. The artists would be paid in digital currency according to the terms specified in the contract, without the possibility of piracy problems.
In the 2016 U.S. election, Democrats and Republicans questioned the security of the voting system. The Green Party called for a recount of votes in Wisconsin, Pennsylvania and Michigan because the vote did not match the estimates.
The computer scientists said hackers can manipulate the electronic system to manipulate votes, so any government vote around the world can be sabotaged.
With Blockchain this possibility becomes impossible and votes are encrypted. Individuals can make sure that their votes were counted and confirm who they voted for.
Below are some examples of how Blockchain can act in government systems:
The blockchain can facilitate the self-organization of companies, charities, foundations and government agencies, among others.
This is done through a self-management platform, which works with smart contracts, in which the parties can interact and exchange information on a global and transparent scale.
The social responsibility of voters in elections can be regulated through smart contracts. These can ensure that voters can be elected by the people so that the government is what it should be: a clean, transparent and caring entity.
Contracts specify the expectations of the electorate and voters will be paid only once they do what the electorate demanded rather than what the funders wanted.
In other words, politicians’ salaries would be regulated according to the fulfillment of their electoral program: if you comply, the smart contract is self-executing and the politician receives his salary; otherwise, he will not receive it.
Identity based on Blockchain
We like it or not, online companies know everything about us. Some companies from whom we buy some items sell our identity data to advertisers who send their ads. But you do not even need to buy from a company.
The following message is a standard message:
If we notice, once we go for example to Amazon to check a product, then this item comes later on a website that we are visiting and that has nothing to do with that item. Against this kind of digital harassment, we are unprotected nowadays.
However, Blockchain has a solution to this as well.
This technology protects your identity by encrypting it and protects it from spam and marketing schemes like those in the previous example. A protected data point is created in which information that you do not want to reveal to others is encrypted, showing only certain information that is necessary for relevant people at certain times.
For example, if you go to a club, the barman only needs the information that tells him that you are over 18 years old, not other info like the websites you visit or your musical tastes.
Some examples of the use of Blockchain in relation to identity are the following:
The first digital passport was launched at Github in 2014 and could help owners identify themselves, both online and offline.
That could be done by taking a photo of your passport, which is digitally encoded and stamped with a public key and a private key. This photo is added to the blockchain with a public address so that it is accessible and can be confirmed with the rest of the network..
Birth, marriage and death certificates
Few documents are more important than those ones that prove who you are, where you were born, the marriage, or the death, and that open your rights to all kinds of privileges (such as voting, working, or citizenship itself).
However, inequality and mismanagement in the world is widespread. Up to one-third of children under the age of five have not received a birth certificate, UNICEF reported in 2013.
The blockchain could make record keeping more reliable by encrypting birth and death certificates and making it easier for citizens to access this important information.
We always keep close with us a series of identifications that are necessary in our daily life: our driving license, the computer user and password, the identity card, your own copy of the car or house keys, and a long list of other things.
It would be much easier to identify with only one thing in relation to all the others.
This idea already exists in a different scale: in many Internet sites you can register with your Facebook profile, or you can perform tasks on your mobile with the use of your fingerprint (even with the image of your face), such as opening mobile applications or pay for a purchase online. However, the blockchain technology will accelerate this process even more.
Blockchain ID is a digital form of identification that is designed to replace all these forms of physical identification.
In the future, scientists claim that a single digital ID can be used to register anywhere, whether online or physical.
As we have seen throughout the article, the so-called Blockchain is a digital chain of blocks with information that are interconnected to each other and that are created and managed by an enormous network of computers at the same time, instead of being centralized or controlled by someone in particular.
This idea, so simple on the one hand, is being revolutionary in many fields and industries, starting with the one where it was born: the cryptocurrencies.
However, there is no day that goes without the discovery of new applications for this technology and that more people are becoming interested and working with it.
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