The truth about blockchain
It has now been 10 years since Satoshi Nakamoto published his famous “white paper” on Bitcoin in 2008. Mr. Nakamoto remains undetected and is considered a pseudonym, but Bitcoin is better known than ever. Over time, Bitcoin has moved out of its niche existence into the public eye, not least because the underlying technology — the blockchain — is described as a revolution. But what advantages does blockchain offer and which use cases can be implemented with this distributed ledger technology, or DLT for short? Various factors must be taken into account, such as security, costs, applicability as well as aspects of civil and tax law.
Blockchain — in a nutshell
First of all, blockchain does not immediately mean crypto currency, but rather it is the technology that makes crypto currency possible in the first place. This is comparable to the Internet as a technology that made it possible to use e-mail in the first place. Blockchain is a technology that, as a distributed network, enables manipulation-proof, decentralized and consensual data storage. It is to be regarded as a digital register, which is similar to a database but differs in that it is distributed to several participants in a decentralized manner.
Data blocks containing specific information are processed in this register. The special thing about this is that each subsequent data block is cryptographically and therefore encrypted to the previous data block. Like a chain consisting of individual links, a blockchain is built from data blocks in this way. By encrypting the consecutive data blocks, it is not possible to subsequently remove or manipulate a data block from the chain. A manipulation would be revealed because the encryption is no longer consistent. All blocks and transactions are also publicly visible.
Blockchain is a technology that creates a sequential chain of transactions. This is done via a distributed network, consisting of various actors, who together contribute to the continued existence of this chain and network. In contrast to the early Internet, which was more about the exchange of information, which was usually provided by a server, the blockchain increasingly includes decentralization and the exchange of values. Users can participate in a blockchain and take on tasks for which they are paid. Coins or tokens can in turn be used to pay for goods or services.
