Welcome to our first blog of the segment Wayru Crypto Academy #WCA: the place where you’ll learn all about the amazing crypto world.
Technology is moving fast. All of what we know about it is just a small part of its full potential. But there’s a concept that is becoming a complete revolution in the way we interact with others, but most importantly: the way we handle information. Yes, we’re talking about blockchain.
It’s well known that those who have the information, have power. Since our system works in a way in which most of the activities we do depend on an institution like a government, a bank, or an enormous company, we are not able to rule the system. So, when this institution has an error, all that’s on our hands is waiting and trusting our information will be secured. Plus, these institutions barely work for the people, but for themselves, so it’s quite common that they will try to accomplish their needs and interests first. But what if we tell you that there’s a way to democratize information, as well as the power it comes with.
Blockchain became popular in 2008 with the paper “Bitcoin: A Peer-to-Peer Electronic Cash System” published by an anonymous person or group of people under the pseudonym Satoshi Nakamoto. It explains that money transactions could work independently from any financial institution through an “electronic payment system based on cryptographic proof”. What does that mean? Well, imagine you have a group of friends that want to pay each other some money. To verify who paid how much to whom, each of you will have a record of all the transactions every member makes, so whenever one person wants to send money to another, all of you will have it registered.
That’s practically the job of a bank: having registration of all the movements between people, right? Then, instead of that information being on just a pair of hands, it’ll be on the hands of every participant. To avoid people trying to make up transactions, double or manipulate them, the information will be chained cryptographically. In other words, each transaction will have a specific registration that cannot be changed and that is unique for one movement. A cryptography code is the answer here, or correctly named: hash.
Therefore, there will be a block of information that contains the transaction details and a hash. But to make it valid, it will have a third element: the hash of a previous block. Remember each hash is unique, so information can’t change without changing the hash too. By constructing the chain, if someone tries to manipulate the information inside a block, the hash will become a different one, and so will the one that’s next to it, and so on. In that way, blockchain becomes a secure and decentralized system.
Blockchain is more complicated than that, and as you might be thinking: what if someone hacks the chain and starts making up more information? Who is going to verify that the information inside a block is correct and can be added to the chain? How can that work with millions of people making transactions at the same time? And we do have the answers to all of those problems, so stay tuned to our blog and follow us on our social networks! We can’t wait to introduce you to the magnificent crypto-world.
Join the WayruFam