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Blockchain Updated: 26 Sep 2018

The year blockchain technology and Bitcoin take off?

Little is known about the advance in this technology, as with Bitcoin –its strongest virtual currency– which after a few months immersed in scams and irregularities, is now recovering consumer conference.

bitcoin blockchain moneybox resource bbva

Bitcoin is the most famous and the strongest of the around 700 virtual currencies circulating on the Internet. Behind the currency lies the technology known as blockchain which –as defined by BBVA Research,“is a peer-to-peer public accounting system maintained by means of a distributed network of computes which requires no central authority or third parties acting as intermediaries”.

This technology “consists of three fundamental components: a transaction, a transaction register and a system that verifies and stores the transaction. The blocks are generated using  open-code software and register information regarding when and in what sequence the transaction takes place. This "block" stores chronological information on all the transactions taking place in the chain –the origin of the name "blockchain".  In other words,  blockchain is a stamped and immutable hourly database of each transaction that is replicated in servers around the world. This technology is the basis of Bitcoin, a cryptographic currency”.

Bitcoin cryptocurrencies

The mysterious disappearance of Satoshi Nakamoto

What distinguishes “normal” transactions is that they do not require an intermediary or centralized entity, and therefore the risk of human error is reduced. People who buy Bitcoin on the Internet obtain an alphanumeric code –between 27 and 34 characters– which allows them to make payments to other people who have the electronic wallet. Bitcoin allows transactions between users via P2P, the exchange of information between equals, the same system used in the exchange of music and film archives. In 2008, according to Wikipedia, Satoshi Nakamoto published an article published an article describing the Bitcoin January 2009 the P2P Bitcoin network came on line with the publication of the first customer, code, and the creation of the first Bitcoins.Curiously, Satoshi Nakamoto today is on all journalists' most wanted lists. After writing the article that launched Bitcoin and exchanging mails on the virtual currency for two years with colleagues, in 2011 he disappeared. No one has ever seen his face or heard his voice, and it is not even known whether his name is real or invented. A mystery about which much has been written, and which has even found its way into the world of comics (Bitcoin,the hunt for Satoshi Nakamoto, by Alex Preukschat).

Satoshi Nakamoto was the first to “mine” Bitcoins. Back to BBVA Research: “When people buy or sell Bitcoins, a secret code or token is sent  to the system. The "miners" use nodes, computers, or devices connected to a network to identify and validate the transaction, using copies of all or some of the blockchain information. Before the network accepts the transaction, the miners have to show a "proof-of- work" using a cryptographic hash function: a special algorithm designed to provide high levels of protection. The miners receive some kind of remuneration for their contribution to computing power, thus avoiding the need for a centralized system”.

Since its creation in 2009 the virtual currency has grown relentlessly. It is estimated that investment in Bitcoin technologies is now worth almost one billion dollars, and all the signs are that this figure will continue growing. And this investment comes not only from venture capital companies. Some of the financing rounds in 2016 are predicted to exceed 100 million dollars, according to the financial consultants Magister Advisors.