Abstract

A blockchain is a distributed database that contains sequentially interlinked (‘chained’) clusters of transactions (‘blocks’) with tokens that follow the rules of a specific trust protocol. In this description, three concepts stand out. First, a distributed database, as opposed to a centralized database, is an organized collection of data that is integrally held at physically or logically separated storage devices. This implies that each of these storage devices contains a full copy – not a subset – of the database in question. Second, in essence, a token may either be a hardware device (for example, a chip card) or a piece of data (for example, a string of characters), although there are more sophisticated taxonomies that apply multiple criteria to classify tokens in blockchains [1]. A token as a piece of data is the type of token that lives on a blockchain. Specifically, in the realm of blockchain a token is a chain of digital signatures that represents (tangible or intangible) assets that are exchanged in transactions. The cryptocurrency Bitcoin can be considered a token. Third, the software that manages the exchange of assets via tokens on a blockchain is dubbed the trust protocol to indicate that in a blockchain world trusted third parties are replaced by this software.