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The term blockchain has been appearing more and more in the Brazilian and world press. One of the reasons for this interest is that the use of the technology has expanded, reaching the financial market, the health sector and even the commercialization of works of art.

However, many people still don't know the exact definition of the term - and how it differs from another very popular term, bitcoin. To dispel this doubt and talk about the current uses and potential of blockchain, we've prepared this article. Have a good read!

What is blockchain?

Blockchain is a system for recording transactions that is gaining more and more ground in the industry due to its practicality. It is also the main system by which bitcoin and other cryptocurrencies are traded.

Blockchain records work by means of blocks of transactions protected and optimized by cryptography. They are connected to each other and cannot be modified once the transaction has been verified. Their security is therefore one of the aspects most praised by experts.

Another important point is that there isn't just one blockchain, a single chain of records. A currency like bitcoin uses one network of records, while ethereum uses another, and so on.

Something that all blockchains have in common is the ability to track, monitor and record any kind of value. This includes not only financial transactions, but also elements such as:

• real estate deeds;
• shares on the stock exchange;
• digital identities;
• supply chain data;
• data management.

Bitcoin has been closely observed or already put into practice by financial and banking institutions, for example. This is because the technology is capable of generating significant savings, due to the operational efficiency that the network of records promotes in relation to business confirmation and authentication processes.

What is the relationship between blockchain and cryptocurrencies?

Many people still confuse blockchain with bitcoin - or believe that the network of records only works when a cryptocurrency is involved. However, its use has expanded greatly over the years.

First of all, let's clear up the confusion: blockchain is the technology that records information and transactions. Bitcoin is one of the most famous cryptocurrencies, whose businesses use blockchain technology to enable transactions between users.

In the beginning, the blockchain really was the chain that made bitcoins mobile. Not surprisingly, the first mention of the term occurs in 2008, in the academic article "Bitcoin: a peer-to-peer financial electronic system", published by Satoshi Nakamoto, the supposed creator of the best-known cryptocurrency.

That's because nobody really knows who Satoshi Nakamoto is - you can't even tell if that's his real name. Even so, his legacy in the cryptocurrency and blockchain world is undeniable.

However, as the community has studied the technology more and more, blockchain has shown far greater potential than simply serving as an exclusive means for cryptocurrencies to be transferred.

To give you an idea of the independence of blockchain, it is estimated that the global market for the various applications of the technology will generate around US$20 billion in revenue by 2024.

NFT (non-fungible token)

Digital assets known as NFTs work by means of certificates of digital authenticity for a given work. Thus, paintings, games, books and even memes have been marketed using the format.

The NFT is capable of transforming any digital file into a unique and irreplaceable work. You may be wondering: what is the relationship between these tokens and blockchain? It's simple: the transaction of these assets is recorded through this registration technology, because of its security and agility.

How has blockchain been applied in the market?

The most interesting thing is that blockchain has already been used effectively in the market. Let's take a look at some examples of applications.

International payment systems

Instead of needing intermediaries in different regions, the use of blockchain provides the creation of an integrated network to guarantee the compensation of users in real time.

To this end, IBM has developed the IBM Blockchain World Wire tool, which enables transactions to be settled in record time through the use and transfer of digital assets.

Health records

With the ability to work beyond the simplest functions of a conventional database, blockchain can also be used to record data from various sectors - one of which is healthcare.

One example is Anthem, a US insurance company that started using blockchain at the end of 2019 to guarantee its patients secure and optimized access to the medical information they were looking for.

Material tracking

BMW, the German vehicle manufacturer, also has a blockchain pilot program to track inputs and components throughout the production chain. The technology is also used to track certain events in the life of a car and even to connect vehicles so that they share information such as speed and location.

Monitoring donations

An arm of the United Nations (UN) has relied on technology as a way of tracking donations. In this way, the organization ensures that they actually reach their recipients and are not diverted or used by criminals.

In addition, the international organization is able to monitor whether duplicate shipments have taken place, which would result in certain families receiving twice as much food and others nothing at all.

Brazil already has more than 180 startups dedicated to blockchain services, which shows that there is already a large market for the technology in the country. Recently, companies such as Mercado Livre and Nubank announced that they are investing in their own cryptocurrencies.

As you saw in the article, blockchain is definitely here to stay. Its versatility, the security it provides and its growth alongside the world of cryptocurrencies explain the rise of this technology and its global reach.

Its use goes far beyond financial applications. As blockchain is already present in the Brazilian market, it could be the innovation tool that a company needs to establish itself once and for all in the segment in which it operates.

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