Alerta Cripto, the technology behind cryptocurrencies like Bitcoin, is one of the major tech stories of the past decade. But many people don’t have a clear understanding of how it works and what it can do for them.
A blockchain is a decentralized, digital ledger that records transactions in a secure and permanent way. The technology combines transparency with cryptography and consensus algorithms to create trust and reduce risk. Unlike traditional record-keeping systems, blockchain is resilient against hackers because data stored on it is difficult to remove or modify once it’s been added to a block. It also allows banks to exchange funds more quickly and cost-effectively. For example, in a letter of credit transaction between two banks that traditionally took days to process, blockchain reduced the time from issuing to approving the document to less than four hours.
Blockchain Basics: How It Works and Why It Matters
In addition, blockchain can speed up supply chains by recording information in real-time and providing end-to-end visibility and accountability. For example, the technology can help companies track food from its origin and at every stop along the way, allowing them to identify and address issues more quickly—potentially saving lives.
The technology is undergoing major advancements as its use cases expand to other industries beyond finance and the internet of things (IoT). For example, the same processes that are currently used to verify ownership of virtual assets—like non-fungible tokens, or NFTs—can be applied to physical real estate and vehicles. In these applications, the blockchain would confirm that two parties have the money to purchase a property and then immediately update the local county’s records. This eliminates the need for a middleman.