The emergence of distributed log technologies (DLTs), also known as blockchain after the popular blockchain that powers the Bitcoin cryptocurrency, virtually challenges the role of intermediaries. In essence, a blockchain ensures the exchange of unique cryptocurrency codes through an accounting system that rewards users themselves for recording movements and verifying that the database is not tampered with.

In 2008, Satoshi Nakamoto announced the creation of a digital currency, bitcoin. This new currency had no need for banking institutions or central banks in any country, and allowed people to transfer money to each other based solely on cryptographic keys. The supposed honesty of the banking world was replaced by that of an entire verification network, which would follow very specific rules.

The political, economic and social implications of the new concept, followed by the merry-go-round of ups, downs and speculations about the value of a global currency, uncontrolled by any authority and therefore practically anarchistic, diverted attention from the real value of the underlying technology, on which it is based. The blockchain. A record that contains all the transactions carried out and that any user of the network can verify, which was called a blockchain.

The technology behind bitcoin, and several hundred different cryptocurrencies, when applied to money, addresses the problem of trust. Traditional currencies rely on governments holding gold, while bitcoin relies on solving complex computational problems. Moreover, as with cash, a bitcoin cannot be used simultaneously in two different transactions.

When a 'miner' observes a transaction, it incorporates it into a block of data, and if it solves the corresponding challenge (essentially, an 'elliptic curve digital signature algorithm', ECDSA), it links it to previous blocks.

That is blockchain, files that have some information from other files to which they are linked. A technology with two essential ingredients: the blocks of information and the network of computers, in each of which all the information is stored. It is not distributed.

Blockchain technology is extending to other fields where the concepts of security and verified identity are of broad significance: document certification, proof of origin and traceability of products (including food), resource sharing, or property rights... The possible applications open up an immense range.

As conceived, bitcoin can only reach the finite figure of 21 million, which makes it dubiously useful if it is not appreciated relative to other values or currencies, be it the dollar, the gold standard or a barrel of oil. In fact, although cryptocurrencies can be traded in certain cases, to buy and sell goods, or for shady criminal operations, the value is always established with reference to the exchange rate with a 'real' currency. And the same is true of other cryptocurrencies, although they may be better designed, uncapped or with much wider margins.

Leaving aside such monetarist vagaries, blockchain technology is a new paradigm for accrediting the identity of objects, which cannot be altered unilaterally by a single agent. Any transaction needs the validation of the blockchain. In a digitally oriented world, with the entry into service of millions of smart objects that generate data (IoT), control of products that move around the planet and new systems for managing financial transactions (fintech products), digitisation of healthcare and even dissemination of information, blockchain technology can provide the ability to uniquely and unalterably identify an item of value.

Spain's role

Blockchain technology is being improved at an accelerating rate, trying to accommodate business needs. It will surely bring about a revolution in the global economy, bringing about changes that are in many cases unforeseeable.

It is digital technology. It is not based on having sophisticated systems for the production of physical goods, raw materials or a supply chain, nor on having extraordinarily powerful computer hardware, but, fundamentally, on the mathematics used ('backed by math'). In the ability to imagine possible applications and a sound knowledge to develop the right programming for those purposes. It is an environment where the starting point gives no particular advantage to any country, or to any working group, beyond the ability to recruit talent and people already experienced in the field.

Any individual or working group can identify a potential application target, launch their project and develop it, taking advantage of a global ecosystem of computing, storage and cloud tools (including AI) without the need for a large capital investment.

Blockchain is therefore an opportunity for countries with a good education and research system. An investment in talent that develops cryptographic techniques, based on number theory, algebraic geometry (elliptic curves) and random processes would take Spain to the frontiers of this technology.