Documentation in Blockchain: Ensuring Transparency
Documentation is a component of the token economy that stores all the details of an asset on the blockchain.
What is Documentation?
Documentation is one of the four main components of the token economy, which refers to the economy of goods and services that have been tokenized. Thanks to blockchain, these economies can function without intermediaries, documenting and validating ownership (documentation), digitizing tangible assets (tokenization), implementing certain rules (governance), and enabling potential trade (trade).
Blockchain technology is great at creating tamper-proof records. Documentation is the foundation of transactions and can secure various other financial transactions. Blockchain is also suitable when records and data need to be protected from tampering and revision. Documentation on blockchain is immutable, meaning it cannot be changed.
Once something has been documented on the blockchain, it is possible to create a unique fingerprint (called a hash) of that data. This allows you to prove at any time that you have the original, unchanged file by simply checking it again. If the file has not been changed, the hash will always be the same. The documentation also includes a timestamp – this ensures that you can track the exact moment at which a block was validated by the blockchain network. Because the entire network is synchronized between nodes around the world, the timestamp ensures that data entry can be validated and recorded. Outside of the blockchain environment, proving the unchanged time of origin of an agreement, statement or signed document is nearly impossible. Images can easily be edited in photoshop and signatures can be altered.