The principle of blockchain is regarded as the basic technology of the crypt currency Bitcoin. That is why it plays an increasingly important role in many areas where transactions are made over the internet without money. Technically speaking, behind a blockchain, a decentralized and unchangeable electronic register is hidden in the form of a database in which all transactions are securely stored. At the beginning is the so-called “creation block”, to which more and more blocks can be attached and thus make more space available. Blockchains represent a digital register in which two parties run payment transactions with bitcoins and sensitive data such as contracts or rights. All data used is encrypted, after the entry in the blockchain data can neither be changed nor deleted. This guarantees a high degree of safety.
The core area is still today the implementation of digital payment transactions between two parties with the crypt currency Bitcoin. All transactions with Bitcoins guarantee secure payments through encryption and are transparent at the same time, since all transactions are recorded without gaps. Another application that has a high potential is automation. For example, sensors can be installed in households that detect functional problems. The arts and music scene, on the other hand, profits by blockchains to secure their license rights, by registering their proprietary rights and their interpretation directly in the blockchain. They also pay the license fees in Bitcoin.
Complex approach, complex implementation
The principle of blockchains is comparatively difficult to implement. If a company has decided to use blockchains, it should know about the technical challenge:
- The blockchain is complex
Decentralization is used for revision-secure data storage, which means, there are many database copies within the network. In order to be able to change entries in the blockchain, a hacker would have to fake about half of all elements – that is not worth it. On the other hand, the blockchain technology only works when a high-performance IT environment allows permanent data storage at different locations.
- The degree of safety depends on the environment
Decentralization creates emergency safety. The IT environment also ensures the basic data security. If a blockchain is in use, users must comply with both the logical and the physical security criteria. Data access must only be carried out by authorized personnel, which necessitates the use of high-security centers.
- Blockchain is trusted
For individual companies the establishment of a blockchain becomes a technical challenge, which they themselves cannot master. That’s why they should get help from a technical partner such as a full IT service provider. As a basis for trustworthy cooperation, the partner should fulfill the requirements of the General Data Protection Regulation (GDPR).
- Blockchain affects multiple business areas
Blockchains can be used not only on a branch-specific basis, but also in different areas of a company. The application of the shared approach brings cost-savings potential and creates the possibility to jointly develop the solution together and to search for innovations. However, companies should seek reliable IT and distribution partners.
The modern approach of “Blockchain-as-a-Service” relies on the merger of colocation, managed services and infrastructure-as-a-service services (IaaS). Due to technical complexity, companies wishing to establish a blockchain should rely on certified partners.
Will the blockchain get through?
At the moment, many people see a high development potential in technology, but the technology is still very much at its beginning. Especially the so-called “Smart Contracts”, which are implemented on software, will play an increasing role. Over time, additional areas of application will certainly be added.