The blockchain technology is being seen as a leading technology with the potential to change paradigms. The Internet of Things, Industry 4.0, and mobile payment methods — independent of banks and borders — will be more efficient and more useful for every day in the near future through blockchain technology.
A blockchain is a series of transactions in blocks which are determined and validated by a protocol which has been determined beforehand, and which built on one another. If one tries to alter an entry retroactively, one must automatically alter all control values of the following blocks. This is not possible. What arises is a ledger which is irreversible and validly correct beyond a doubt with records of individual transactions. Instead of a complicated network of offerers and services, a single instance which all involved parties trust — a blockchain — emerges.
Censorship-free Internet, copyright information, and patents — even the tracing of the keeping of all regulations of a single chicken egg from the farming of the chicken and the healthiness of the hen which lays the egg, through the middlemen (intermediaries, distributors) and transportation (logistics), right up to one’s own breakfast table — can all be guaranteed with a simple blockchain and at the same time made transparently available to the end consumer. We will soon encounter blockchains in everyday life everywhere. We are sure of it.
Many industries are aware of the fields of application of blockchains in the global market. The developments in this sector are progressing rapidly, so that smaller businesses and mid-sized companies can profit from blockchains.
The most developed blockchain is the one that builds on the virtual currency Bitcoin. (Financial) transactions between addresses are recorded mutually in a blockchain by all participants, which enables the decentralized exchange of values beyond national borders — rigidly in accordance with a protocol that was developed independently of banks, governments, or other institutions, and which acts in a self-organized and self-regulating manner. The responsibility for all transactions is placed in the hands of the users.
Meanwhile, further specialized blockchains (and currently many hundreds of cryptocurrencies that are based on them) that possess special characteristics and which open new fields of business for the future have been developed. The young blockchains, such as, for example, those of the cryptocurrency Ethereum, offer services such as Smart Contracts on formalized protocols.
Following the principle “learning by doing,” the INCREON Digital Lab is using blockchains and cryptocurrencies and observing developments and principles, in order to recognize services and possible services, to learn to read trends, and to be able to estimate consequences for the future.
The INCREON Digital Lab is going beyond just observing by researching blockchains and applications on the basis of the use and application of Bitcoin, Ethereum, Smart Contracts, etc. In doing so, we are gaining valuable experience that we are able to apply to the development of applications based on blockchain technologies. We have already recognized some problems, through which we have become aware of the structures, their limits, and degrees of freedom on several levels: economic efficiency, legal framework, efficiency, and creative application scenarios may be studied on a productive system in operation.
Most transactions in Bitcoin take place in China. A significant trade volume is located on Chinese platforms that are directly affiliated with the Chinese financial system and are subject to the rules and the control of the Chinese State Bank. What arises are innovative accesses to new, currently arising markets that are growing together with the established ones. For example, in China a thriving ecosystem of industry, trade, and services has developed, so that here future-oriented debates about the use of blockchain technologies are taking place. By the way: Japan has accepted Bitcoin and other digital currencies as “currencies” since March 2017. Up to that point, Bitcoin was legally a “good.” In doing this, Japan has recognized Bitcoin as a legal means of payment in its country. Therefore, we at the INCREON Digital Lab in Shanghai are engaged in further developing blockchains and cryptocurrencies and are observing their integration into existing financial systems and industries.