The basics of blockchain technology
To begin with, let's take a look at what is meant by this technology. In very simplified terms, a blockchain is nothing more than a large database that starts with an original block. New data blocks are chronologically appended to this, but before this these blocks are checked and confirmed. In this way, a "data record chain" is formed from the consecutively stored "block data records", which, however, are not stored centrally on a computer. On the contrary, these data records are distributed across many computers, and the most important task of the blockchain is to document digital transactions securely and thus to create a history of data records.
What does that mean exactly now?
This means that a blockchain enables information or data to be transmitted in a forgery-proof manner with the help of a decentralized database used by many participants. Copies are therefore ruled out by this procedure.
This is encompassed by the term DLT (Distributed Ledger Technology), which refers to the database as a distributed register or ledger. So the database is stored on many computers in a peer-to-peer network. In this process, each new node takes over a complete copy of the blockchain when it joins, which immediately makes the node responsible for not only documenting the transactions, but also verifying them.
So DLT are basically a collaboration model built on a very old idea: the cooperative system.
DLT is the only way to transfer this system to the digital world and rethink it. Politicians are also concerned with DLT and have even commissioned their own strategy, which can be viewed here. https://www.bmwk.de/Redaktion/DE/Publikationen/Digitale-Welt/blockchain-strategie.pdf?__blob=publicationFile&v=22
How does it work now?
A process is initiated by generating a block (data record). This block is then verified and stored by a large number of computers in the network. After the verified block is verified, it is cryptographically encrypted and then attached to a blockchain (chain of records), creating a large number of unique records, which in turn have their own fully traceable history. This means that everyone who participates in the blockchain system stores a complete copy of the data history on their computer, greatly increasing tamper resistance. So if a copy is tampered with or manipulated in any way, it can be easily filtered out, as there are enough other adequate copies to match.
Another verification mechanism is provided by the checksum, which is used to secure the sequence of blocks. The blockchain is not limited to one type of information, besides financial transactions, this technology can also be used for accounting, securing music, photos, texts and others.
The importance of this technology will continue to grow in the future, as we are only at the beginning of this application. Bosch, for example, has also recognized this and is introducing the conceptual world of blockchain, as can be read here: https://www.bosch.com/de/stories/blockchain-einfach-erklaert/
How do we use blockchain technology at TrustCerts?
The path we are taking, and on which our customers are accompanying us, lies in the foundation of the blockchain for our processes. The processes of our products in digital signatures at TrustSigner and forgery-proof certificates at TrustCreator are secured by an efficient blockchain, which was programmed and implemented by ourselves.
Because no other participant has access to the data and there is no other influence on our technology, we can guarantee trust and security. We are constantly working on the functioning of our products so that it is as accessible as possible for companies.
By relying on "proof of authority" for our blockchain rather than following the "proof of work" approach, we were able to dramatically reduce the energy required while developing a more stable and powerful trust technology.
Advantages and disadvantages of the blockchain
In addition to the obvious advantages of transparency due to the stored history and the high level of security, the cost savings and time savings are also worth mentioning.
Cost savings because the data on the blockchain can be relied on without having to place trust in another party. Thus, a control authority provided by third parties is no longer needed, which significantly reduces costs. The time savings come from the fact that the technology can be compared to a centralized and digital accounting system. This reduces the communication effort between the parties involved and at the same time minimizes the potential for errors through automation.
Of course, there are also disadvantages that should not go unmentioned:
The first thing to mention here is the large amount of storage required, as the blockchain naturally grows and grows automatically with each additional block. This amount of data is thus stored on every node of the network. Another disadvantage can be found in the performance, since the verification of the transaction together with the synchronization take time. Theoretically, manipulation would also be possible, but only when one party controls more than half of the nodes.
High power consumption by Blockchain is also frequently mentioned, especially in connection with Bitcoin. But this is still a first generation version, while the newer generations of this technology, as we use it at TrustCerts, are already far more efficient and economical to use, especially since we rely on PoA rather than PoW in our process. In this regard, there are research projects that will continue to be addressed in order to stay further on the path of environmental sustainability and even optimize it, as we all depend on our environment in the end.