“Blockchain technology or chain of blocks is a mechanism or an innovative digital system that guarantees the validity of the information, this technological evolution proposes a new way of providing security in all types of transactions. Its processes are based on cryptography where sophisticated mathematical algorithms are executed that provide security, speed and low cost ”.
Blockchain The Technological Innovation That Gave Rise To Cryptocurrencies
From this revolutionary technology a new means of digital exchange has been created, we refer to: “The” Digital Currencies “or” Cryptocurrencies “, operate through cryptography, with the aim of ensuring and verifying financial transactions and controlling the creation of additional units of the cryptocurrency ”.
In 2009, the first decentralized cryptocurrency that transformed the financial world was released, we refer to “Bitcoin” (see the ). This digital currency was designed to eliminate intermediaries in commercial transactions, decentralizing all management and giving control of the process to users and not to banks. It was designed to be operated as a fast, secure and electronic medium for the universal exchange of goods and services. Its innovative characteristics and its market volume, position it as number one in the world.
However, since Bitcoin entered the market, a great variety of cryptocurrencies have been created, There are approximately more than 1,300, which have been called: alternative currencies or altcoins, and surely the number will continue to grow.
The innovation of cryptocurrencies is constantly evolving, at least every week a new digital currency is created with the purpose of optimizing the technological advantages of the blockchain and taking advantage of its use in different sectors. This new technology is favouring not only the economic sector but also the financial, commercial, industrial and government sectors.
Regularly, when announcing a new cryptocurrency, companies make initial offers, this tool is known as ICO (Initial Coin Offering) or also Token Offering, allowing to collect funds through the issuance of tokens or tokens. The cryptocurrencies that have stood out for being very promising, managed to receive millions of dollars in their first ICO, we can mention Bitcoin, among others.
As it is well known, cryptocurrencies, like traditional currencies, require control and a balance, as well as a verification and validation, these tasks are regularly carried out by banks, in which the records of monetary transactions are kept. , ensuring that they are impossible to falsify in addition to being able to implement monitoring. So we can say that the banks control everything related to the economy of the countries.
The model proposed by Blockchain technology is to keep financial records throughout the network, this means that it will be operating in a decentralized manner in a network of thousands of nodes or a group of millions of interconnected computers, whose objective will be to verify of the transactions to later integrate them to the Blockchain in a public way, which will prevent any fraud from being carried out.
The advantage of using this Blockchain method to maintain the records on which cryptocurrencies are based is that it can prevent double spending of the same money. This advantage is obviously very important, so below we will describe what bitcoin mining is and how it works for example.