What is blockchain technology?

In about ten years, the blockchain has established itself as a major technology of our time. It is a computer process behind cryptocurrencies like Bitcoin. However, many articles in major daily newspapers talk about it without ever really explaining it. In this article, let’s take a look at the definition of the blockchain and how it works, but first let’s take a little historical detour.

Blockchain and cryptocurrencies before Bitcoin

The blockchain was not quite born with the creation in 2009 of the famous Bitcoin cryptocurrency. It is indeed David Chaum, a PhD student at the University of California at Berkeley, who laid the foundations of the technology in 1982 with his thesis titledComputer systems established, maintained and trusted by mutually suspicious groups“. Then, in the 1990s, the American cryptologist launched a first virtual currency, the DigiCash. However, the success was not there and the company supporting the project closed in 1998.

Other cryptos are imagined before the end of the millennium such as Bit gold or B-money. These two examples remain at the project stage, but inspire the enigmatic Satoshi Nakamoto in the creation of Bitcoin. It is not known who is hiding behind this pseudonym, but the individual (or group of people) publishes in 2008 a white paper describing the functioning of Bitcoin. A year later, Satoshi Nakamoto launched the future cryptocurrency star.

Credits: Make-someones-day / Pixabay

An institutional definition of blockchain technology

The National Assembly’s joint fact-finding mission on the uses of blockchains (the French term for blockchain) and other registry certification technologies listed the definition of blockchain in a 2018 report: “A blockchain is a register, a large database which has the particularity of being shared simultaneously with all its usersall also holders of this register, and who also all have the capacity to enter data, according to specific rules fixed by a computer protocol very well secured thanks to cryptography. »

A more detailed explanation of blockchain

The classic example of banks

Before the advent of blockchain, a single entity usually owns a database (or register). If we take the example of a bank, the content of accounts or transactions is recorded on a computer server. A customer can view his account balance by querying the bank. She then gives him the information according to the database. If he withdraws money, the bank changes the latter and the customer does not know anything else. Registry information is centralized and opaque in the sense that you don’t know who owns debts.

The changes brought about by blockchain technology

The blockchain is a register where all the history of operations is recorded. Once a transaction is made between two people in the blockchain, the operation is encrypted and validated by a consensus algorithm. This consists of a series of checks to determine if the transaction respects the established rules and if there is no fault or cheating with respect to subsequent transactions. Once this task is completed, the transaction is then recorded in a block, like a new link in the blockchain. Finally, the version is shared with the computers holding the registry.

bitcoin cryptocurrency network
Credits: Pixabay / Tumisu

With blockchain technology, the registry is decentralized. There is not one server that holds the database, but a multitude that have no other links between them than that of the blockchain. Information is shared : everyone can consult the history of transactions since the beginning of the blockchain.

The benefits of blockchain

Unlike the example of the bank, composed of services dedicated to the maintenance of databases, the blockchain takes care of the management with automated computer protocols. So there is real savings in maintenance costslabor or transaction costs. The system is securebecause the verification of an operation is done through a network of independent computer servers. Speed ​​is also an asset with transactions taking place in seconds. Also, the blockchain is far from being confined to crypto-currencies. Its uses are numerous and sometimes even surprising!

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