Börse Express – Focus on Blockchain technology

The difference between blockchain and Bitcoin

The topic of cryptocurrencies is polarizing and often becomes the focus of heated discussions. While proponents point to the disruptive nature behind it, to some it is just another volatile asset class. In fact, the idea of ​​blockchain goes back to a concept that was technically developed as far back as 2008 and popularized under the pseudonym Satoshi Nakamoto.

In order to understand cryptocurrencies and blockchain technology, it is necessary to be able to distinguish between the two terms. In fact, blockchain has its origins in the cryptocurrency Bitcoin, but it is not one. Accounting and consulting firm Deloitte puts the concept of blockchain in easy-to-understand terms as follows: “Blockchain is an open-source technology that offers an alternative to the traditional medium of transfer of the cryptocurrency Bitcoin. The medium is replaced by the collective verifiability of the ecosystem, which provides a high degree of verifiability, security and speed.” .

From this definition, interested readers can delve into the topic as they wish. The term blockchain consists of the words “block” and “chain”. For the series, together. Transactions processed within the blockchain are collected as blocks and added to the blockchain. The blockchain itself can thus be viewed as a type of database through which Bitcoin transactions are recorded. Unlike other databases, this is not kept on a single server, rather all network participants have a copy of the entire blockchain in local storage. For this reason there is no need for a central supervisory authority.

Basically, bitcoins are transferred across the bitcoin network around the clock. Computing power is required to process transactions – keyword “mining”. This is a type of decentralized data center made up of “miners” all over the world. However, only the first miner to find a new block receives a reward in the form of Bitcoin for the computing power he or she provides (as part of the validation process). However, this reward (“block reward”) decreases every 4 years until the maximum amount of Bitcoin (about 21 million coins) is reached in 2140.

Reasons why blockchain might be important

The global economy and trade depend on information. Information forms the basis of our daily actions and plays a role in every transaction. The speed at which information is absorbed, collected and processed is becoming increasingly important. Current trends such as the Internet of Things (IoT) are helping to ensure that the volume of transactions to be processed evolves much more quickly than before.

After the initial success of Bitcoin as a new digital currency, attention is increasingly focused on the potential and application areas of the underlying blockchain technology. Because its diverse application possibilities go far beyond the form of digital currency. This results in many applied examples of innovative products and services in the public and private sectors, beyond coins. Above all, the security and traceability of the underlying transaction play a crucial role.

In general, blockchain technology is still in its early stages and many potential application areas have not yet been developed. For this reason, interest in blockchain technology is still very high.

Participate in blockchain technology without purchasing currency

Although things have become quieter recently regarding Bitcoin, there are many examples of potential applications of blockchain technology in the modern, networked economy of the future. Blockchain technology has the opportunity to radically change the way two parties transact with each other. Vontobel recognized the potential of blockchain technology as early as 2018 and, together with index sponsor Solactive, launched the Open End Tracker certification on the Solactive Blockchain Technology Performance Index.

The Solactive Blockchain Technology Performance Index provides a diversified, transparent and strictly rules-based investment opportunity in companies that are directly or indirectly related to blockchain technology. The index takes into account up to 20 companies from different sub-sectors of blockchain technology such as blockchain companies, hardware platforms, software platforms and companies in the most promising sectors with the greatest value creation potential – namely financial services, healthcare, mobility/transportation, energy, media and commerce.

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