18 JUL 2017

What is Blockchain?

Blockchain is the basis of the virtual currency of Bitcoin, a current topic; the cryptocurrency (or digital system of non-physical “tokens”) has a certain value and is used for the negotiation of goods or services, in the same way as physical money.

Bitcoins are not issued by a central bank, like the currencies of the States, but are the result of an algorithm. Until recently to participate in the extraction of Bitcoin (mining, a way to earn virtual currency) was enough a computer powerful enough to add computational power to the network and bitcoins were a sort of reward for sharing own processor. But given the current increase of Bitcoin value, this is no longer the case: to extract virtual currency, a specialized hardware device is required that consumes a lot of electricity. Currently a Bitcoin is worth 2100 euros, but, like other currencies, its value fluctuates according to supply and demand. In 2009, when it was invented, Bitcoin was worth a few euro cents.

Blockchain is a distributed database that uses peer-to-peer technology freely available on the network and accessible by anyone, both passively and actively participating in the network as a node of the same. Blockchain consists of transactions, technically identified by records or blocks of the latter. Transactions are carried out by subjects who want to exchange cryptocurrencies and these transactions must be approved and recorded indelibly in the blockchain using consent algorithms. Transactions are collected in specific blocks, inserted inside the blockchain, through the use of various technologies, including: hash algorithms, digital signatures, etc.

One of the most important features of the Blockchain is safety. Timestamp, hash algorithms and digital signature, in fact, prevent that the operation, once executed, is altered or canceled. Thanks to these characteristics, Blockchain is not just Bitcoin: in fact virtual currency is only one of its possible applications. Without centralized management, in fact, Blockchain allows you to send any data in order to ensure the integrity and transparency of the operation and in Italy is impacting in several areas:

  1. Finance and banks
  2. Insurance
  3. Digital payments
  4. Agri-food
  5. Industry 4.0
  6. IoT
  7. Health
  8. Public administration
  9. Retail

Blockchain, like Bitcoin, was invented by Satoshi Nakamoto, a character who has always hidden his identity, limiting himself to sharing on the web a pdf in which he talked about the functioning of the above mentioned topics.

Edited by Lucia D’Adamo, in collaboration with Roberto Piccirillo, supervised by Marco Pirrone