What Is The Blockchain Or Chain Of Blocks : How It Works And What It Is For

A blockchain is a digital database, which is built on cryptography. The blockchain is made up of digital files of a certain size, which are grouped. In the case of the Bitcoin blockchain, these are bkl.dat format files, whose size does not exceed 128 MB.

In the case of a cryptocurrency blockchain, it is a large book in which each of the transactions made with Bitcoin or some other cryptocurrency is recorded, including the amounts and dates of each purchase-sale transaction.

The blockchain will have to have multiple copies. There are thousands of similar copies held by other users of the same cryptocurrency – such as Bitcoin – or platforms in different places around the world. These thousands of users must have similar data/copies.

Each user who owns a copy -nodes- must agree with the other user owners to include new transactions or data, to achieve a degree of validity and that the data of the book remain uniform in the different versions.

Cryptocurrencies have their own blockchain or other platforms, regardless of who the platform is, they have to register each of their transactions in one of them for its operation to be valid. Said blockchain can be “decentralized” from the distributed network of nodes/computers and based on a consensus algorithm that validates the data or transactions, and the cryptography can be defined as a “public key” that allows opening new wallets.

The denomination as “chain of blocks” is because the pages of the book are more like “blocks” of information that are chained sequentially between each block from the beginning to the end, forming the aforementioned chain. The element in charge of keeping them intertwined is cryptography, which in turn allows the immutability of the information contained, something that may or may not occur, since for example it can be allowed to be exchanged or not, as is the case with cryptocurrencies.

For some years the way we conceive money has been transformed. The appearance of Bitcoin almost ten years ago transformed all the experiences known until then.

To advance in this analysis, it is important to understand the meaning of the word ” privacy ” on the one hand and ” anonymity ” on the other, since at first glance both concepts may seem similar, but they contain important differences.

When we refer to anonymity, we emphasize the possibility of carrying out untraceable transactions, in which neither the sender nor the recipient needs to identify themselves or provide any type of personal information. In another order, privacy refers to the possibility of leaving in total ignorance what and how much we have bought during an operation.

While all Bitcoin can be stored in a single address, it is recommended (not enforced) that you use them only once per trade. The proliferation of addresses is a way of keeping certain information secret, such as who is the individual who controls them and what their fund’s flow is. As there is no limit to the number of addresses, this will not be a problem for any of the investors.

The mixers (or also called tumblers) are mechanisms to, precisely, “mix” or mix backgrounds and make possible monitoring difficult. The use of this method can serve as a way to thwart the loss of anonymity, since, as the number of users involved in the operation increases, following its path becomes quite an impossible mission.

However, it is important to read the contracting conditions of this type of service very well to fully trust the control of bitcoins and not to be branded in the investment community as illegal.

Immutability is one of the properties that is applied to the blockchain, being in this case the capacity of the data registered in the chain of blocks not to be able to be deleted or modified from the registry in which they appear.