Documentation is a part of token economies that stores all the details of an asset on the blockchain.
What Is Documentation?
Documentation is one of the four essential components of token economies – which refers to the economics of goods and services that have been tokenized. Blockchain enables these economies to function without intermediaries while documenting and proving ownership, (documentation), digitizing physical assets (tokenizing), executing specific rules (governance), and enabling potential trade (trading).
Documentation allows you to record all the details of an asset (which can be anything) and anchor its proof of authenticity on the blockchain. The timestamp, signature, author, and fingerprint (hash) become proof of who documented what and when.
Blockchain is excellent for creating forge-proof records. Documentation is the cornerstone of Bitcoin transactions and can secure various other financial transactions. It also works for that cases where records and data need to be forge-proof and revision-proof. Documents on a blockchain are immutable, meaning they cannot be altered.
Once something has been documented on the blockchain, you can create a unique fingerprint (called a hash) of this data. This allows you to prove at any time that you have the original, unaltered file by just verifying it again. As long as the file has not been modified, the hash will always be the same.
Documentation also involves a timestamp – this ensures that you can track the exact moment when a block has been validated by a blockchain network. Because the entire network is in sync across nodes around the world, the timestamp ensures that the input of data can be validated and recorded.
Outside of a blockchain environment, proving the unalterable time of origin of an agreement, statement, or document signed is nearly impossible. Pictures can easily be photoshopped and signatures can be altered.
Documentation on the blockchain removes these uncertainties by proving the integrity of the data and recording the timestamp on-chain. Documentation also helps to prove the author of the record via the cryptographic signature.
Author:
Johannes Schweifer is the CEO of CoreLedger, a company empowering businesses of all sizes to access the benefits of blockchain technology. Schweifer co-founded several blockchain start-ups, including Bitcoin Suisse. He’s a passionate problem solver, holding a master’s degree in Chemistry and a PhD in distributed computing and quantum chemistry.
