What is the Blockchain?
From a technical point of view a Blockchain can be described as:
„“A decentralized protocol for transactions that transparently stores any changes in the data.”
Decentralized means, that the database is stored not just on one server but on a network of several servers. Fundamental element is that the database does not belong to anyone – neither to a company nor to any authority. The Blockchain can be described as a public, infinite journal in which all transactions are stored unalterable, transparently and publicly available. It is a neutral system for information processing. It is forgery-proofed since the majority of the network has to agree upon any new transactions are valid. The contracting parties interact directly using the Blockchain in order to execute their transactions without the need for costly intermediaries such as banks, stock exchanges, lawyers or notaries. Using cryptographic procedures the Blockchain ensures data records (e.g. Bitcoin transactions) to be stored anonymously while maintaining the data integrity.
The main characteristics of the Blockchain are therefore:
- technical process that allows two parties to exchange data directly
- transactions are anonymized
- once stored, the records are unalterable
- everybody can access the (decentralized) database (fully transparent)
- it is said to be impossible to manipulate
The Blockchain can be used whenever information need to be exchanged. Thus, wide range of examples can easily be conceived:
- financial transactions (transfer of cryptocurrencies, e.g. Bitcoin),
- settlement of securities,
- contract processing (smart-contracts),
- transfer of property titles,
- tramsfer of von patient data
Areas of application are basically everywhere where transparency and traceability are needed.