Blockchain Technology : in the Sights of the Financial industry
Why the financial industry is interested in blockchain technology
Blockchian appeared between 2008 and 2009 as a hardware-software infrastructure for a decentralized, scalable, fast and secure support of the Bitcoin cryptocurrency, which implements what amounts t oa public accounting ledger that contains the creatin, assignment of ownership and subsequent transmissions of each bitcoin or bitcoin fraction.
The proper operation of transactins and secure assignment of property of the cryptocurrency is not guaranteed by a supervisory body, but distributed over a large peer-to-peer network (a network of computers or nodes with equal functions and none of which have any special, overriding funcitions),. A blockchain is a database consisitng of sequences of digital signatures. Each participant has a pair of asymmetrically encrypted private-public keys, where the public key is the reference to the owner of the asset receiving blockchain support, while the prvate key, know only by the owne, is used to mobilize the asset; i,e. to transfer its property, whether in part or completely.
Very broadly outlined: if an owner transfers an asset to another person, what the blockchain infrastructure does is translate the previous transaction, which certifies the ownership of the transferring party, into bits (the result, in turn, of a previous digital signature), combine it with the representation in bits of the public ke of the neficiary of th etransfer, while the thrasferring party signes the result digitally with its private key, thereby validating the transaction and new ownership. This signature completes the extent of the previous signatures and leaves a record of all the transactions performed during the asset’s existence. from that point on, the new owner will be able to demonstrate its ownership publicly, since the transaction now includes its public key. The only wat to mobilize the asset again is by using the private key paired with this public key. Anyone can contrast the transacition with the public key of the transferring party.
The name blockchain does not refer to the fact that the asset transfers are chained together, but because at regular internals all recent transactions are wrapped in a block, which is linked to the last block in the chain, therby constituting a blockchain. Ther are many more security and operation details and an introduction on how it works can be found in the following article : Technological keys to understanding Bitcoin.