Documentation

November 21, 2023 - Around 2 mins mins to read

Understanding Documentation

Documentation plays a vital role in token economies, which are economies built on tokenized goods and services. These economies operate on blockchain technology, eliminating the need for intermediaries while recording ownership, digitizing physical assets through tokenization, enforcing rules through governance, and facilitating trade.

The purpose of documentation is to record all the details of an asset and establish its authenticity on the blockchain. The timestamp, signature, author, and hash serve as evidence of who documented what and when.

Blockchain technology is highly effective in creating tamper-proof records. Documentation is essential in Bitcoin transactions and can also secure various other financial transactions. It is particularly valuable in situations where records and data must be resistant to forgery and revision. Documents stored on a blockchain are immutable, meaning they cannot be changed.

Once something is documented on the blockchain, a unique fingerprint (hash) of the data can be generated. This allows for easy verification of the original, unaltered file at any time. As long as the file remains unchanged, the hash will always be the same.

Documentation also includes a timestamp, which enables tracking of the exact moment when a block is validated by the blockchain network. The synchronized nature of the network across nodes worldwide ensures that data input can be validated and recorded.

In non-blockchain environments, proving the unalterable time of origin for an agreement, statement, or signed document is nearly impossible. Pictures can be easily manipulated, and signatures can be altered. Documentation on the blockchain eliminates these uncertainties by proving data integrity and recording the timestamp on-chain. It also helps establish the author of the record through cryptographic signatures.

Author:

Johannes Schweifer is the CEO of CoreLedger, a company that enables businesses of all sizes to leverage the benefits of blockchain technology. Schweifer has co-founded several blockchain start-ups, including Bitcoin Suisse. With a master’s degree in Chemistry and a PhD in distributed computing and quantum chemistry, he is a passionate problem solver.