What is Blockchain: definitions and applications

In recent years, interest in Bitcoin and Blockchain has grown a lot. However, these terms can be confusing and it is often difficult to imagine the practical application of each one of them. For this reason, below we clarify its concepts and highlight its main characteristics. 

What is Bitcoin?

Bitcoin is a cryptocurrency, a digital currency based on cryptographic technologies, which was created in 2009. To this day, it is not known who its inventor is, since the first publication on the subject was made using the pseudonym Satoshi Nakamoto – the real inventor was never made public. 

What is Special About Bitcoin?

It is a currency without central regulation: it is not issued by a country/state. Thus, allows transactions to take place without intermediaries (banks) and in the most complete anonymity. You can use Bitcoin as a payment method in several establishments that already accept it.  

The currency is famous due to the huge amount of people trying to get rich at its expense, buying and selling Bitcoins – its value has increased significantly since 2009. And, although it seems complicated or distant, blockchain is an available solution that can be used in the most varied software development projects. 

What About the Blockchain?

Although we talk so much about Bitcoin, Blockchain is much more interesting. It is the technology that supports Bitcoin and other cryptocurrencies and that seems to be leading us to a new generation of Internet solutions, called Decentralized Web or Web 3. 

There is nothing incredibly new about this technology: Blockchain is based on the internet that we already know, combined with cryptographic concepts that also already existed. The difference is the architecture of the solution, which allows creating a decentralized network in which it is possible to trust the results, even without guaranteeing that all network agents are reliable. 

What Can You Do With Blockchain?

Blockchain is not only for cryptocurrencies, but for any solution that can take advantage of its characteristics: being decentralized, providing trust and immutability, keeping records. 

By now you might be wondering: Blockchain can be used for a lot! Let’s see: 

• Digital Identity and Authentication: it can be used to replace our identification solutions, from Passport and Driver’s License to your login on social networks; 

• Notary and records: it is the perfect solution for legal records, like the ones that notaries do today; 

• Contracts and smart contracts: it can be used to publicly register contracts, but more than that, it can be used as a basis for smart contracts where clauses are executed automatically; 

• Medical Records: we can use Blockchain to keep medical records safe and accessible; 

• Supply Chain: we can use it as a record base for a supply chain, thus ensuring transparency in records between the parties. 

How Do I Use Blockchain in a Project?

Although it seems complicated, Blockchain is an available solution that can be used in the most varied Software Development projects. However, to build a solution that uses this technology, you first need to identify what its features are and how Blockchain can help you with that, and then you need to assess whether it is best to use Blockchain, a Fork or even a platform on top of the Blockchain. 

A Fork is a Blockchain variation that changes some of its operating rules. Depending on the application, there are specific Forks that may serve better. A Platform is one of the thousands of solutions that are already being developed using the Blockchain but with ready-made functions: there are specialized platforms for Smart Contracts, for Identification, etc.

Were to Learn More? 

The most knowledgeable people here at SoftDesign suggest the following sources if you want to learn more about Bitcoin and Blockchain: 

• The Blockchain for Business book can help you understand Blockchain and its applications; 

• There are some interesting talks at TED Talks, such as this one by Dan Tapscott (who is also the author of good books on the subject) and this one by Bettina Warburg; 

• If you want to take a look at the concepts, it’s worth knowing Satoshi’s original article, which explains how the Blockchain concept applies to make Bitcoin work. 

Thinking about using Blockchain Technology in a digital product? Fill out the form below so we can help you! 

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