The Blockchain brought a revolution to the financial system

Many banks have already seen the "magic" of the blockchain in their labs of search and development.

A few years ago in college, I remembered the accounting discipline where I had to register accounting entries in the ledger book to keep track of all transactions. If a mistake was made the wrong balance would be transferred to the next pages of the ledger book and to correct it the only way was to go back to the first page and rewrite everything until the current page.

The bitcoins already have been shown in the news as agents of changes in the global financial system. But despite this, it took a little longer until we discover what's behind the bitcoins and how it represents a much greater revolution not only to the financial system but to anything that needs a decentralized management with information security. We're talking about the Blockchain, that has the potential to start a new revolution in the information age.

If we go back to the college, there is a little detail that I haven't mentioned but not less important. As all students had to register the same accounting entries, the teacher knew exactly the balance that everyone had to have in the ledger book. We all had to have the same balance and the same transactions at the end.

Now imagine if, by magic, all the ledger books of all students had a behavior like they were one. What if we had distributed the accounting entries to the students so each one could register only the given accounting entry? Imagine if every time a student registered an accounting entry that same entry would be replicated to all the other students' ledger books by that same magic? What if those same magic books had the ability to avoid anyone from changing the entries already registered? Imagine if the fact of a single book gets destroyed for some reason was irrelevant because all the other books have all the information that was in the book destroyed.

Obviously, to do that class work in a collaborative way registering accounting entries in the ledger books individually (as they were a single book) would be much faster and easier.

The Blockchain is precisely the technology that turns this magic into reality. Essentially, a Blockchain is a distributed and decentralized group of nodes or databases that replicates information between themselves working as a single source. One of its main features is that the information entered can't be changed. Therefore, we can trust the information from any node.

But how this "magic" happens? Thanks to many encryption models that guarantee the information inviolability. The nodes are in a chain, encrypted in such a way that if someone tries to corrupt any data, all the chain gets invalidated and replaced by the previous version of the same chain. This happens because the Blockchain has a set of rules that demands a consensus between nodes to validate information. However, maybe the most relevant aspect of this revolution is that there won't be a need for a centralized and not distributed database who's manager is an institution, company or organ.

This is just a short introduction to this matter. There is much more to talk about the Blockchain.