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Definition and uses of Blockchain

definition and uses blockchain

We can say that Blockchain technology, has been present around us since last years, this concept has been acquiring value, however, many times doubts remain whether or not fully understood  what we are talking about when we talk about Blockchain. Below we will explain what it is, how it works, what its benefits are and how safe it is.

definition and uses blockchain

How was Blockchain technology born?

Throughout history, the word has suffered several economic crises and this is the main reason for the bird of blockchain.

Its creator thinks that people don’t need a governmental entity in charge of administering and categorizing the money they have in his possession but it is possible to create a decentralized payment system that depends on the community to stop depending on a bank. 

What is Blockchain?

Blockchain Is an alternative payment system, it is characterized as a decentralized and encrypted transaction record which allow store, send and confirm transactions. All the transaction register information is stored on each computer participating in the system. 

What’s more, it is a technology based on a decentralized and public operations blockchain that generates a shared database to which its participants have access and  they can track each transaction that they have made. This transaction generate data that will be store in the blocks, and when that block is complete with information it will join the already existing blockchain.

Blockchain allow innovation in the financial sector, and others industries, and administrative processes so they will be more efficient and transparent.

What is a block made of?

A block is made up of three parts:

  1. Alphanumeric code: links to the previous block.
  2. The “package” of transactions that are part of it.
  3. Another alphanumeric code: will be linked to the following block.

At Epical we can help you in the process of planning, implementation and monitoring of Blockchain technology to take your business to another economic scale! Boost your business with Epical, a technology innovation agency. 

Types of Blockchain technology

There are two types of blocks: public and private.

  • Blockchain Publics: accessible to everyone, you only need a computer and internet connection.
  • Blockchain Private: the access depends on the central unit (company, organization or individual) better known as blockchain consortium. 

Characteristics of the new technology on the rise

Smart contracts 

Some blockchain have the characteristic to be programmable, you can find inside the blockchain some instructions for being executed. This is known as smart contracts; the data inside is encrypted making it impossible to lose the information and helping to simplify the process since exposes the rules and automatically complies with them.

The goal is that no one is an intermediary in the legal and financial fields.

Nodes and security

A node is someone behind a computer that is dedicated to storing and distributing an up-to-date copy of the blockchain.

To avoid all kinds of hacking or attempting to sabotage the blockchain to introduce fake transactional data, there are two several security measures.

The consensus protocol is a mechanism that allow regulate the way in which the nodes approve the blocks.

There are two different types of protocols:

Proof of work (PoW):

it was the first to be implemented in the Bitcoin blockchain. All nodes in the network are equal to each other and compete to be able to take the reward for performing the block validation. How do they compete? Solving a mathematical test and its difficulty is associated with the number of nodes that participate.

But this form has a disadvantage: a very high energy consumption. 

Proof of stake (PoS):

This protocol was created due to the disadvantage associated with the PoW. In this case, in order for a block to be validated, it’s necessary that the validator possesses cryptocurrencies or tokens from the network in which it’s trying to validate.

Algorithms are used to randomly choose who will add the next block: the more shares they have purchased, the more likely they are to win the validation. This way has an advantage: they are faster and consume less energy.

Advantage of the Blockchain

  • Reduce fraud of operations: since all participants have access to transactions and to be able to modify them a consensus is necessary.
  • Build trust in business.
  • Transactions are economical.
  • Non governmental entities know what you have.
  • International payment .

At Epical we can help you in the process of planning, implementation and monitoring of Blockchain technology to take your business to another economic scale! Boost your business with Epical, a technology innovation agency. 

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