What Does DeFi Mean and How Does It Affect the World of Cryptocurrencies?

1) Introduction

The term DeFi or Decentralized Finance is the evolution of the well-known FinTech that were born in the twentieth century. Its objective is to offer a whole range of services built on a decentralized infrastructure. One that allows the user to interact with the platform directly, leaving the intermediaries behind.

Something that has finally been possible thanks to the emergence of Blockchain technology. This is due to its ability to generate self-sustaining ecosystems without the need for a central entity to regulate them. All while maintaining system security, privacy and trust.

2) The birth of DeFi

The birth of DeFi as we know it started on the Ethereum blockchain. Ethereum's ability to offer flexible smart contracts was what made this step possible. By 2018, Ethereum had already active one 15 projects dedicated to DeFi. Mainly projects dedicated to liquidity markets, lending systems and Decentralized Exchanges (DEX).

Most of them just moved their traditional counterpart to the world of Smart Contracts and blockchain. But the really revolutionary point in this experience was the fact that it was totally decentralized. Without intermediaries, without annoying paperwork, fast and secure, it was the birth of a new era for finance.

Since then, the growth of DeFi in the world has been growing more and more. But not only that, many specialists agree that it will become an important part of the world economy and finance.

3) Operation of DeFi platforms

The operation of DeFi is possible thanks to blockchain technology and one of the tools derived from it, smart contracts. The concept of smart contracts was created by cypherpunk Nick Szabo in 1994. Szabo conceptualized them as an autonomous program capable of executing a series of instructions or clauses according to whether a series of instructions had been complied with. It was the equivalent of a legal contract but brought to the computer world and enhanced with the ability to be autonomous and completely anti-cheating.

Nick Szabo's vision was ahead of its time. He had to wait until the appearance of Ethereum when he was finally able to see a smart contract working. It wasn't perfect, but it was enough to start building new things. That was how Dapps or Decentralized Applications were born, programs that ran directly on the Ethereum blockchain and with which we could interact using tokens and a browser. A second advance that finally opened the doors for the construction of the DeFi.

Smart contracts, the building blocks of DeFi

The functioning of any DeFi platform is precisely the union of these two creations. A smart contract (or a series of them) that has the ability to handle money autonomously and a Dapp that allows us to interact with that smart contract in a simple way. All this running on the blockchain, where each action is recorded permanently and inalterable.

All this was realized in 2016 with the creation of Ethereum's The DAO. This was an Autonomous Decentralized Organization or DAO, whose function was to allow its participants to exchange their money for different projects through proposals. An action that was possible only with the vote of the majority of the participants accepting this proposal. The DAO quickly transformed into one of Ethereum's largest projects. But a security problem drove the project to its worst, following the theft of $ 50 million in ethers.

Despite the attack and the known risks, the community continued to develop the concept of DeFi. With the ICO boom in 2017 many DeFi projects received funding to achieve their plans. This is how the world's first DeFi platforms were born, many of which are still working today.

4) DeFi platforms today

Currently there are a wide variety of active DeFi platforms, many of them were born in the ICO boom of 2017. Each and every one of them has its pros and cons, and most run on the Ethereum blockchain. All this has made Ethereum stand as the most important blockchain for the DeFi movement.

But let's know some of these DeFi platforms and that they offer us:

MakerDAO

MakerDAO is a well-known DAO that runs on Ethereum, with the purpose of creating a DeFi ecosystem powered by its token Maker and its dollar-anchored stablecoin, the DAI. The MakerDAO system allows the value of the token Maker to stabilize the value of DAI through a dynamic system of Secured Debt Positions (CDP), autonomous feedback mechanisms and duly incentivized external actors.

This way, users can leverage their Ethereum assets to generate DAI on the MakerDAO platform. Once generated, the DAI coin can be used in the same way as any other cryptocurrency. So you can protect money or participate in the extensive system of Ethereum Dapps that accept DAI as a means of payment.

For example, it is possible to access a Dapps of decentralized loans on Ethereum and pay with DAI an equivalent amount in dollars in a matter of a few minutes. In addition, there are other platforms that offer the payment of interest for saving money using DAI, as if it were a traditional bank. And even, we can use our DAI on loan platforms, to offer peer-to-peer (P2P) loans for which we will earn a certain interest.

AAVE

AAVE (formerly ETHLend) is a DeFi platform dedicated to decentralized lending. The platform is primarily focused on offering users of Ethereum and several major tokens running on this blockchain, a fast and secure platform to access loans. To do this, AAVE has a large number of features ranging from exchange, repayment, redemption, deposit, payments, tokenization (with issuance and burning of tokens own platform).

0x

Another widely known DeFi platform is 0x. This platform runs on Ethereum and is focused on building decentralized exchanges (DEX). With this, 0x seeks to change the strangest paradox in the crypto world: its centralized exchanges. Exchange platforms such as Binance, Bitfinex or Poloniex are centralized platforms, where their owners can make the decisions they want and manipulate such exchanges.

This situation clashes head on with the decentralization promoted by the blockchain. That's where 0x wants to be a factor of change. To achieve this, 0x has created a series of smart contracts that we can use to create our own secure decentralized exchanges.

Augur

Augur is a DeFi platform focused on building an oracle to conduct prediction markets. The name of the platform comes from a Roman word used to identify priests with gifts of divination.

The goal of Augur is to offer its users the opportunity to develop markets in which other users can bet. It uses the "Wisdom of the Crowd" of the platform's predictors and winners to create near-accurate real-time predictive data. To achieve this, Augur uses the Ethereum blockchain and all its activities are stored in the history of its REP token.

As you can see, DeFi is not just money management, it is much more than that. The diversity of uses of DeFi is immense and largely unexplored. The platforms listed here are just some of the existing platforms.

5) Importance of DeFi in the blockchain ecosystem

defis are increasingly becoming a major player in the blockchain ecosystem. Beyond activities like HOLD or staking, DeFi allows cryptocurrency users to create new ways to produce money and increase their investments. In addition, the constant increase in cryptocurrency users and the enormous economic potential of blockchain such as Bitcoin, does nothing more than improve the future estimates of this sector. Especially when it is known that there is more than $ 1 billion in liquidity in these markets.

But beyond the blockchain ecosystem and its users, defis can open the doors for traditional investors to finally be tempted to enter the ecosystem. The injection of liquidity by these investors would dramatically increase the liquidity of crypto markets and create a whole bonanza of services that underpinned the presence of blockchain in the world.

Given this scenario, it is understandable the vital role that DeFi have in the blockchain ecosystem, a role that could lead to the worldwide massification of this technology and took us deeper and deeper into the economic and financial revolution that Satoshi Nakamoto sought with the creation of Bitcoin.

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, September 24, 2021

Blockchain: A disruptive technology with the power to revolutionize financial services...

Blockchain is a technology you need to know about.

Because of its immense potential, more than 70 of the world's largest financial institutions (including Barclays, JP Morgan, Royal Bank of Scotland, State Street and UBS, to name a few) are part of a consortium researching and developing blockchain technology.

In addition, PwC's Global Blockchain Team has identified more than 700 startups in the space and blockchain technology is seen by some as the fifth paradigm of computing after the mainframe, the personal computer, the Internet and ultimately the mobile and social networking revolution.

Still not familiar with blockchain? You are not alone. In fact, according to a 2016 survey of top-level executives at some of the world's leading financial institutions, less than 20% of respondents described themselves as "very familiar" or "extremely familiar" with the technology. That said, 56% of respondents recognize its importance.

Why this lack of familiarity with a technology that has the potential to revolutionize commerce as we know it? We believe this is due, in part, to the fact that many industries are still focusing their efforts on leveraging the Internet and mobile technology to enhance customer experiences. 

The financial services and insurance industries in particular are catching up in this space. With so much attention focused on front-office platforms, little attention has been paid to archaic back-office and mid-office systems, where blockchain technology is most applicable.

Another contributing factor to the lack of awareness in this space may be that people have difficulty understanding what amounts to a paradigm shift in the way humans have always done business.

At Equisoft, we believe that blockchain technology and its potential implications for the financial services and insurance sectors deserve special attention. As such, we have formed an internal blockchain working group to better understand the technology and how our customers can leverage it.

The group's first initiative was the development of the basic introduction to the topic contained in the following pages. We trust that our overview provides you with some clarity and food for thought regarding this potentially revolutionary technology.

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, September 22, 2021

Ixinium update...

Stellar XXA:

* Company has segregated $100,000 onto the DeFi pools, which monthly income/yield will be distributed to the XXA Buyback program.

* Company has started to do preparations for the coming Stellar protocol update. This is done with the full professional Stellar coders who have deep knowledge of the Stellar Core and the development possibilities around the coming Stellar AMM protocol update.

* Precious metals purchase program is activated. The service that we use to purchase precious metals has added cryptocurrency payment possibility through the crypto-fiat-crypto service provider. Currently, we are just waiting for account verification for the Ixinium Foundation. All the needed documentation has been handed in last week.

Ixinium Finance:

* Due to the big amount of "flash loan" attacks for the Binance DeFi providers, we have to spend extra time on the safety and security updates. Currently, we are working on the last tests as we needed to change one of the tokens that were in use on the Ixinium Finance pools. Mainly because of their protocol security issues.

The Ixinium Finance protocol is in the last phase before publishing. Better information about the launch, first sell process and the liquidity pooling is coming after we have the green light to launch from the devs.

Ethereum XXA:

* The code is under modifications following CertiK audit report guidance. Estimated time approx two weeks and we will hand the code back to the CertiK. The coder who created the Ethereum XXA token is removed and won't ever do any work for the Ixinium organizations. CertiK found something on the code that was not supposed to be there at all. Code is under the modification/fixing by the company that's building the Ixinium Finance app.

Future:

Ixinium XXA ecosystem will cover Stellar, Ethereum, Binance, and either Solana, Polkadot, Tron, and/or Matic blockchains. 

Currently, Ixinium XXA covers Stellar blockchain. Ethereum XXA is coming, which will be "The Ramp" for the other blockchains. 

Stellar DeFi will open new kinds of doors in the near future. The doors that we don't fully know yet.

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

Alejandro.Asharabed@aol.com

+54911 5665 6060

Buenos Aires, 2021, 10 August.

Fundamentals of Blockchain Technology...

Some examples of applications with a strong foundation on blockchain technology...

Blockchain applications are all the rage these days. The literal translation of this anglicized term, Blockchain, is blockchain.

Blockchain is the technology that eliminates the usual intermediaries that exist in classic economic transactions. The process liberalizes controls and it is the users themselves who supervise the exchange.

What is the process that emerges with the blockchain revolution?

For example: An individual wants to send money to another individual, this transaction is represented as a block in the network. This block is then transmitted to all nodes or users in the network and is approved by all users in the same network. This block, finally, is added to the blockchain that exists in that network which provides an immutable and transparent record of the transactions, concluding the process with the arrival of the money to the individual in question, of course, that this is one of the many examples.

Why is blockchain technology generating so much interest?

The possibility of blockchain technology being applied to other aspects beyond the economy has increased the interest in this technological revolution. In addition, the fundamental characteristics of immutability, transparency and de-centralization that the Blockchain provides, give it that character of robustness and security, which makes this new technology more reliable, while calling into question the usual and spurious methods of banking institutions.

At first this process was seen as a threat by the banks. But the commitment to a transformation in the logic of transactions has forced banks to pay more attention to the development of this technology. This is why the usual transaction methods, characterized by strong centralization and the need for the bank to act as an intermediary, are losing interest with the arrival of a technology that will revolutionize the way we know today's economy.

Open and decentralized system

The fact that it is an open and decentralized system where security is a necessity that must take precedence above all else generates an increase in confidence among users and a clear commitment to the use of this method.

Leading companies are starting to use these applications for different utilities; from the consolidation of a fully public, transparent and digitized ledger to the efficient storage of data or the tracking of shipments are just some of the most innovative applications that blockchain provides.

The development of blockchain technology is still to be seen, the main applications that we can observe today are those related mainly to the so-called cryptocurrencies, the proliferation of Bitcoin or Ethereum as alternative payment methods to ordinary money is already a reality. By 2017, it was estimated that virtual money moved more than $100 billion which indicates that economic and financial digitalization is here to stay.

Some examples of applications with great foundation on blockchain technology.

There are many applications that can be given to the blockchain, the possibilities can be endless. Although at present its functionality is highlighted by the use that is made of it for economic transactions, it is true that different institutions or companies find in this applicability some novel ideas that can be practiced in other areas. The following are seven examples of technological applications that are being used from blockchain.

1. Cloud storage

Cloud storage from blockchain, for example, allows the creation of nodes in different geographical locations that are able to withstand the failure of any server. This decentralization of information allows an integration of data that constitutes the overcoming of one of the most challenging challenges of technologies: the longevity of data.

2. Digital identities

In addition to the danger of digital identity theft in recent times, the blockchain provides a single, secure and immutable system that is the optimal solution to the problem of identity theft.

3. Data registration and verification

Another important point is registration and data verification. This process, often subject to hacking, could be decentralized to prevent other interests from interfering, thus establishing a new, more secure registration method for users.

4. Smart contracts

With the emergence of cryptocurrencies, there is also the rise of so-called smart contracts. These agreements can be fulfilled automatically, since they are implemented by means of a computer program and their fulfillment is not subject to interpretation by any of the parties. This reduces time and costs.

5. Supply chains

Blockchain will also be important in logistics management. The interest it poses for supply chains is focused, above all, on the possibility of an improvement in the supervision of food chains or in the tracking of production. This is why countries such as the United Kingdom already use 22% of such applications.

6. Automated security

The same goes for automated security; the incorruptibility of the blockchain allows the information required to be obtained without paying attention to security flaws that can result in data theft. In addition, the surveillance system can be used throughout the day without the possibility of the server going down.

7. Voting system

Finally, in an increasingly digitized world, some nations consider the blockchain as a new way of approaching democracy; obtaining from this application a new framework on which to regulate, for example, the voting system. Although some cybersecurity experts believe that blockchain cannot yet ensure the security of electronic voting, U.S. states such as West Virginia have already implemented this methodology.

(The fundamental characteristics of immutability, transparency and de-centralization that the Blockchain brings, give it that character of robustness and security, which makes this new technology, more reliable, while calling into question, the usual and spurious methods of banking entities)...

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, 2021, 28 de julio

What is Blockchain and how does it work?...

From one day to the next, Blockchain technology seems to have appeared in our lives and promises to revolutionize everything as we know it. But, beyond the promising practical application it offers us, this blockchain-based technology has not appeared out of nowhere.

Before even considering its feasibility, cryptographic technology (as a security method based on encrypting data to unauthorized recipients) has been researched for years: at first exclusively by the military and governments, later in algorithm research that developed the public key signatures and electronic signatures we know today. Thus, we arrived in the 1990s, a time when various computer projects appeared that sought interaction between users without the need for intermediaries and preached freedom of information.

What is Blockchain?

Blockchain is, by way of simplification, a digital ledger (ledger in English) that allows, through the use of computers, the storage of updated information permanently, with all copies of all computers being synchronized with each other.
A blockchain is a registry, like a ledger containing digital data, which is distributed or shared among many people at the same time. It can only be updated by the consensus of the majority of participants in the system.

When one person sends money to another, that transaction is represented in the Blockchain network as a block, which is transmitted to very diverse places within this financial network. At that moment, other users appear on the scene, who are the ones who approve that that transaction is valid, and automatically after it is approved it is added to the chain, making its transparency clear. Once the block has been correctly tied up, the receiver has his money.

Does it really give confidence that a group of strangers inspect and validate the transactions you make?

It may raise concerns that there is no centralized institution that organizes it. Currently all the platforms we make use of over the internet are backed by a central authority that we trust (bank accounts, Whatsapp, Google, etc.). In Blockchain, in order to forge an entry in a blockchain it would be necessary to simultaneously convince more than half of the people involved in the digital record we are referring to. Which is complicated to say the least.

No one knows who is who within the Blockchain network, only a transfer from one digital account to another is observed. In addition, as it is a decentralized network without a main computer, called P2P networks, everything is accounted for without the ability to be hacked.
In short, Blockchain represents a collaborative ledger written by consensus. The distribution of this consensus results in an incorruptible record of events that are recorded.

The Blockchain network is not always linked to money. There is, for example, the token, which is the representation of an information hosted on the network, so it can be any asset, good or service, not necessarily financial. Token transfers travel encrypted, so their distribution is secure and their content is not revealed, whether they are bitcoins or a car rental.

What characterizes the Blockchain system

A main feature of the Blockchain system is based on privacy, respecting identity thanks to the use of cryptographic keys. Moreover, since it is not allowed to be altered, it is a system that provides transparency in its operations. For this reason, it is considered to be the most important trust-giving technology in history, to the point of making it possible to dispense with the use of intermediaries in the registration of transactions.
This leads us to the decentralization it implies, as it does not require any type of institution to regulate or approve its operation. 

Moreover, this feature has always been one of the ideological pillars that have accompanied this project. Jeff Garzik, a renowned developer, said about Satoshi Nakamoto, who is credited with the creation of the Bitcoin system, "Satoshi published an open source system so that no one needed to know who he was or what knowledge he had. Open source software makes it impossible to hide secrets. The source code speaks for itself."

At the same time, it reduces logging and data control tasks. Blockchains avoid duplicate logging, only one log regardless of the number of participants.
Decentralization and not having a central node where all the information is agglutinated means that the intervening parties have full confidence in this technology. Its immediacy minimizes the counterparty risk produced in other transactions, where the payment commitment takes several days to be executed, thus avoiding risks of non-payment, bankruptcy or fraud during the payment process.

On the other hand, Blockchain has a scalability problem, the transaction speed is slow (due to the time it takes for each block to close) and the size of its database is growing exponentially. Currently the size of the blocks is over 100Gb, which makes its use at a domestic level not viable.
At the same time, we find a lack of regulation by legislative systems, giving rise to uncertainty in its use as it is not known what kind of regulations States and Central Banks will undertake in the future regarding this technology.

#Blockchain #Criptos #DeFi #Altcoins 

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, 2021, 28 de julio

What is the Blockchain?...

To be perfectly honest, knowing what blockchain, or blockchain technology, is is not going to help you become a better trader or make more profit. However, knowing at least superficially what it is is going to help them to: 

1) Understand the fundamentals of the assets that will be executed with traders. A crude analogy would be that of a stock trader who does not know what a company's stock is or what it represents.

 
2) Familiarize themselves with the elements of a blockchain that they will use, such as sending and receiving cryptocurrencies, sharing their public key, safeguarding their private key, etc. 

3) Understand how this new asset class works, identify the elements from which its value could be derived and create your own opinion of the future of this industry. Here is a definition that is simple to understand and encompasses the main characteristics of this technology. Simplistically, blockchain can be defined as: 
A record of transactions grouped into blocks, which are secured by cryptography and is usually distributed.

If this definition seems a bit complicated to you, you could also understand it as follows:

Blockchain is like a giant Excel, or a giant notebook, that everyone has, where everyone can write, that is always updated, but that no one can modify what is already written.

Let us now look at each of the elements of the definition separately and in a very simplified way to better understand each other. It is a record of transactions since all the movements that occur at all times and all over the world are written there. If Alice sends money (or in this case cryptocurrencies) to Bruno, this act is recorded. If Bruno then sends it to Carlos, this is also recorded. Everything is always recorded. After a certain time, 10 minutes in the case of Bitcoin, all valid transactions are grouped into a block that, once created, can never be modified. Every 10 minutes on average a new block is created, which refers to the previous block, forming a chain. 

This entire process, from sending cryptocurrencies to "immortalizing" transactions in blocks, is secured by cryptography. 

Among the most relevant elements are public-private key pairs, elliptic curve cryptography, hashes and Merkle Trees. These are more advanced topics beyond the scope of this section.

What are Cryptocurrencies?

Just like the answer to what is blockchain, knowing the answer to what are cryptocurrencies is not going to make you a better trader, but it is preferable that you know it. Knowing what they are will help you understand how to send, receive, store, and safeguard your assets. Without further ado, here is one of the many definitions that cryptocurrencies can have:

Cryptocurrencies are a digital medium of exchange that uses cryptography to secure transactions.

This is an even broader definition than the one we saw previously for blockchain and this may be due to the fact that its development started only a few years ago. The first and best known cryptocurrency is Bitcoin, which was proposed in 2008 and launched in 2009. Little by little new cryptocurrencies were created until reaching the more than 2,000 that exist today. 

Cryptocurrencies are so new that even different central banks and international organizations such as the BIS, the IMF and the World Bank are still debating whether cryptocurrencies are really currencies, assets, commodities, securities... or perhaps a new asset class. 

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, 2021, 28 de julio

IMF, World Bank and BIS champion central bank digital currencies at G20...

A new report released by the triumvirate of global finance argues that central bank digital currencies will benefit worldwide development.

In a joint report, the International Monetary Fund (IMF), the World Bank and the Bank of International Settlements (BIS) have proposed to the G20 that a cross-border network of central bank digital currencies (CBDC), underpinned by efficient technological integration and proactive international cooperation, could be of significant benefit to the world economy.

The report focuses on broadening the horizon beyond central banks’ individual studies of CBDCs for domestic needs, emphasizing that it is crucial to coordinate work at a global scale and to find common ground between various national efforts to reap the full benefits of digital currency.

If tackled astutely, the IMF, the World Bank and the BIS believe that the creation of CBDCs could offer a “clean slate” that would enable the global financial system to significantly enhance the efficiency of cross-border payments.

The report paints a bleak picture of the current system for cross-border payments, which is beset by long transaction delays and high costs due to an excessive number of intermediaries operating across different time zones across the correspondent banking process.

Moreover, cross-border flows are often opaque and difficult to trace, presenting a problem for Anti-Money Laundering (AML) and combating the financing of terrorism (CFT) implementation. Over the past decade, the attenuation of cross-border banking relationships has left some countries struggling to integrate into the global financial system fully.

The report weighs the significant benefits that CBDCs could present for increased efficiency and enhanced economic inclusion against the potential global macro-financial implications and risks involved in the widespread use of CBDCs for cross-border flows.

These challenges include dealing with the sudden capital flow reversals enabled by more frictionless cross-border flows and the potential impact on countries’ ability to manage their exchange rates. If the foreign currency becomes easier to obtain, store and spend, widespread currency substitution could potentially undermine states’ monetary policy independence and pose risks to both issuing and receiving countries.

A worldwide push for CBDC issuance, the report notes, would therefore require tight integration of multiple CBDCs and uniformity of design choices, alongside specific measures designed to mitigate these macro risks.

The groundwork would not only be conceptual and design-focused but would imply coordinated strategies, standardized practices and a degree of structural integration, ranging from the creation of new international payment infrastructures to targeted policies. The latter, for example, could include introducing limits on foreign CBDC holdings or transfers.

Related: UK chancellor names CBDC on list of financial reforms for Treasury

In addition to extensive infrastructural cooperation on technological interoperability and payment system access, there would need to be a similar level of regulatory coordination, implying the alignment of supervisory and oversight frameworks for cross-border flows and the coordination of AML and CFT measures.

While most countries are studying or developing pilots for CBDCs, central banks have taken a wide variety of distinct approaches to CBDC design and have paced their research and development efforts differently. China’s digital yuan is well ahead of the international game, and multiple countries have piloted CBDCs for cross-border use, including France, Switzerland, Singapore and Bahrain, to name just a few.

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, 2021, July 18

How does Blockchain work?

In order to explain in a summarized way the functioning of Blockchain, first of all, it is necessary to know the main elements that integrate it. Thus, the main components of a blockchain system are the following: 

1.0) The blockchains where the transactions that take place on the network are noted. 

1.1) The blocks are sequentially linked to each other, through functions called hashes (cryptographic digests), forming a chain. Each block has a certain maximum capacity and is like a page of an accounting ledger, in fact it is the accounting ledger, practically infinite, in which everything that has been written can no longer be erased or altered, which gives it absolute immutability.

2.0) The nodes are simply the computers, i.e. each user, that store the copy of the accounting ledger, i.e. they store the blockchain. To be configured as a node, each computer must have the corresponding software and in case of being a permissive network, obviously with the relevant permissions. 

3.0) Digital wallets or wallets, which are mere applications or interfaces through which users make transactions and manage their digital identity (ID) in order to operate. It is a simple app that can be downloaded to the user's device, through which the private key and the public key with which each user can operate are available.

3.1) On the other hand, there are also so-called miners, especially in cryptocurrency networks, who are the nodes that authorize the addition of blocks to the chain and, to do so, they must solve a mathematical problem following a consensus protocol. 

For this effort (which involves having great capacity and using a lot of energy) they receive rewards in digital currency that come both from new coins, which are created by mining the transaction, and from the commissions paid by those who order the transactions. 

In cryptocurrencies, mining can primarily use Proof of Work (PoW) or Proof of Stake (Proof of Stake) systems.

The operation of a common blockchain transaction begins with the sending of a digital asset from one digital wallet or wallet to another digital wallet of another user. 

These transactions have to be endorsed by several nodes and grouped with other transactions and then be taken by the miners as a job that they have to solve in exchange for a reward. 

The miners choose a set of transactions that can be different for each group of miners and compete with each other to obtain what is called a value (nonce) that solves the puzzle or mathematical challenge that authorizes the miner who solves it, (logically in a mechanized way through his computational capacity) to propose his block with the transactions that this block contains, to be added to the blockchain. 

This proposed block also includes the identification and hash of the previous block, thus establishing the linearity of the chain. All blockchains are distributed, i.e., they run on computers volunteered by people around the world, so there is no central database that can be attacked. A potential attacker would have to have at least 51% of the network to try to achieve his goal. 

For example, in the Bitcoin Blockchain, every ten minutes, all transactions made are checked, sorted and stored in a block that is joined to the previous block, thus creating a chain. If you want to steal a bitcoin you have to rewrite the entire blockchain in full view of everyone, which is practically impossible.

The encryption system is essential in blockchain. In 1976, Whitfield Diffie and Martin Hellman created the algorithm that bears their name, with which they proposed to break encrypted keys into two keys, so that there would be a public and a private one. The public key can be used to encrypt a message, but the private key is needed to decrypt it. 

These authors, together with Ralf Merkle, creator of the Merkle Trees and Ron Rivest, Adi Shamir and Leonard Adleman, creators of the RSA algorithm that allows the encryption and decryption of messages, constitute the group of creators of public key cryptography.

To make fraudulent modifications to the operations would require launching a simultaneous computer attack on the various databases. If, for example, an attempt were made to modify the contents of one of the blocks, the rest of the network devices would respond instantly, corroborating that the altered data does not match the rest and reverting it to the original. In this way, a healthy record is kept of operations in cryptocurrency networks and problems such as double spending or other malicious actions are avoided. 

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, 2021, July 18

What is Blockchain?

This was the usual question asked by everyone.... When this enigmatic anglicism was first heard, it was from the day Satoshi Nakamoto, the father of Bitcoin, published his White Paper on October 31, 2008, the day the world's first cryptocurrency based on the Blockchain was born. But it was not until, between 2014 and 2016, that this term or anglicism began to become popular in certain circles and business areas, defining itself, exponentially, towards a growing diversity of social, economic and institutional environments.

Blockchain, translatable as "blockchain", is a technology that is part of the field of so-called distributed ledger technologies or DLT (Distributed Ledger Technologies). It allows managing data, orders, transactions, assets and tokens, through an ingenious distributed or decentralized registration system that is recorded in blocks of information that are sequentially concatenated creating a chain of blocks or immutable and unalterable records, collaboratively shared among all members of each blockchain network, and which are verified by these members of the network, acting as "nodes" of the same.

In this way, a registration procedure is created, which works by means of consensus cryptography, equivalent to a ledger, but in this case digital, of which there are as many identical copies as members of the network. The cryptographic consensus used ensures that there is a single auditable and unmodifiable version of the data stored and of each movement or transaction, which introduces a sort of decentralization of the concept of trust, now based on P2P (peer to peer) collaborative relationships that do not require the existence of a central authority, as has been the common denominator to date.

In contrast to the traditional centralized databases housed in a central institution or on its servers, a distributed, decentralized, shared and replicated database can be created using blockchain, which can be public or private, permissive (accessible only to those who are admitted as members of the network, as occurs with a private or closed blockchain that could be created, for example, by a business group, a government organization or a network of military bases) or non-permissive (freely accessible to any user who wishes to do so by installing the appropriate free software).

The data or transactions recorded in the distributed ledger or accounting database must be immutable, auditable, have cryptographic protection and be equipped with a system for verifying their veracity, a task performed by the so-called validator nodes. This procedure allows the registration of different transactions on a decentralized basis, facilitating the exchange of information between parties in an efficient, open and verifiable manner.

Blockchain is known as the Internet of Value, also the Internet of trust, as opposed to the current Internet of information, since it allows the transfer of value or digitized assets between users, as opposed to the classic Internet that only allows sending information or copies of assets. A simple example can help to understand this difference: Currently, copies of a photograph can be sent from one device to all desired users, while with blockchain, ownership of the photograph can be transmitted to another user. The same idea works for countless applications that are currently being developed: transfer of property titles, financial assets, etc.

An essential element of blockchain is that it allows users who do not fully trust each other to maintain a consensus on the existence, status and evolution of a series of shared factors; in other words, the network itself acts as a guarantee of faith, introducing systems of trust between strangers. From a technical point of view, this trust and consensus-based system is built from a global network of computers managing a gigantic database.

There are currently several blockchain networks operating worldwide, somewhat like different operating systems. For example, bitcoin, the famous cryptocurrency, which is configured as the first effective and globally widespread application of blockchain, is one of them. Another of the most prominent is Ethereum, which is formed by thousands of nodes distributed around the world and that form a platform on which you can move or develop many specific applications, given its versatility, being especially useful for the development of so-called Smart contracts, with the ERC-20 protocol for the creation and exchange of tokens.

In fact Blockchain, is the network that is being implemented in the world, of semi-public or public character requiring the identification of the participants and multisectorial, in which companies of all types and sectors participate, from small start-ups to the majority of technology companies, consulting firms, recognized law firms, various universities, banks and private and public institutions.

Alejandro O. Asharabed Trucido

Neura.Blockchain@aol.com

+54911 5665 6060

Buenos Aires, 2021, July 18