Database examples

Blockchain and Telekom technology: definition and examples


Deutsche Telekom uses blockchain technology and participates in public blockchain networks. Together with its subsidiary T-Systems MMS, it supports blockchains such as Celo, Polkadot or Q. In doing so, the Deutsche Telekom subsidiary pays particular attention to the greatest possible sustainability: for the sake of the environment , it is only involved in the participatory network proof (see below). Both will continue to develop their activities in the field of blockchain technology. After all, blockchain is one of the most important technologies of the future. It enables smart and secure applications and drives digital transformation for business and society.

What is Blockchain?

Blockchain is a distributed public database and enables the Internet of Values. It stores transactions that can be viewed by any user. A blockchain gives people non-discriminatory access to a wide variety of services. Their entries are grouped into blocks. The term “chain” comes from the chain to which transactions are added in chronological order. Blockchain networks are increasingly used in companies: In banks as in insurance and health, in trade or in logistics.

Why is the cloud a cornerstone of blockchain?

Deutsche Telekom provides infrastructure to operate and secure nodes (validators) in blockchain networks, for example. The Open Telekom Cloud plays an important role because the majority of all blockchain nodes run on cloud platforms. The Open Telekom Cloud meets the strictest security and compliance requirements. The cloud also enables the establishment and delivery of digital identities (Self-Sovereign Identity, SSI) via the Internet. Many digital services require verified and secure digital credentials.

Example: Blockchain in the financial sector

Currency transactions are probably one of the best-known examples of using a blockchain. It works like a cash book: if person A transfers money to person B, this information (data) is entered in a block. When a block is full, a new block is added. Each node (computer) in the network has a copy of the blockchain, so it knows each user’s “balance” and complete transaction history. No bank is needed for payment transactions. Payments are made using cryptocurrency as a digital payment method. For example, for money payments without a bank account in decentralized finance (DeFi).
Example: Blockchain in the economy
The food, pharmaceutical or automotive industries, for example, use blockchain applications to trace their supply chains. This makes it possible to detect and combat counterfeits more quickly. For example, pirated medicines endanger the health of patients. They also affect the profits and reputation of the pharmaceutical company.

Diary of an apple in the blockchain

Germany cultivates approximately 191,512 hectares of fruit and vegetables. Using a blockchain, consumers can digitally verify the journeys of their food without interruption: from cultivation to transport and sale to the consumer’s table. Apple buyers, for example, can use blockchain to learn more about the farm, pesticide evidence, harvest time, carrier, cold chain, delivery time, or apple condition.


Staking
Staking means that users lend their purchased cryptocurrencies (coins or tokens) to the blockchain. In doing so, they secure the blockchain network and the transactions made on it as so-called validators and receive rewards in return. As a reward, staking users receive coins or tokens.

What does Proof of Stake (PoS) mean?
The Proof-of-Stake (PoS) approach defines which participant of a network is allowed to generate the respective block. The entrant is determined by means of a weighted random selection. This mechanism is faster and more energy efficient. For example, money transfers on the Celo blockchain require 700,000 times less data than other cryptocurrencies. Celo even requires that every service provided to the network be CO2 neutral.

What does proof of work (PoW) mean?
The Proof of Work (PoW) approach, on the other hand, which is used for Bitcoin for example, requires relatively large computing power. Many mathematical tasks must be solved across the network to create new crypto value (mining). It consumes a lot of energy.


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