Frank Roessig (Telindus): the history of blockchain
Frank Roessig, head of digital finance solutions at Telindus, provides a comprehensive explanation of blockchain evolution, its applications and the outlook of this developing technology. Interview.
What is blockchain?
Block chain is a technology that was developed to allow data (information) to be transferred without being copied. It consists of three components: a chain of information that cannot be altered over time, which means the history of a chain is permanently recorded; a consensus mechanism that defines how we get from n to n+1; that is, a set of guidelines which determines the contributions made and agreed upon by all the participants in the chain; and a shared record or “ledger” on which all of that information is stored and shared.
« Blockchain is only just beginning. Time will tell just exactly how it will revolutionize the world.»
Is blockchain new technology?
No, blockchain has already been with us for over a decade now. In fact, we are already at the third generation of blockchain. The first generation was Bitcoin. The Bitcoin blockchain was very important because it solved the “double-spending” problem – that is, it made sure that you can spend 1 euro only once not twice. The second generation was Ethereum blockchain and its smart contracts. This made it possible to do more than just make a payment. Smarts contracts allow for complex transactions, such as the transfer of money or assets, etc., in a transparent way without involving an agent or go-between (lawyer, broker, etc.). Third generation blockchain, like Stellar and Hyperledger for example, focus on trust and authenticity issues. Confidentiality is especially important in business and these blockchains permit one to choose who can approve a blockchain. They allow for a permission blockchain with only authorized people. Other new blockchain such as Aion are working on making the blockchain network more interconnected like the World Wide Web. They believe that this increased communication between different blockchain networks will lead to better function and operation of the whole.
What do we use blockchain for today and what is its future potential?
The two governments have been active in promoting friendship between the countries. Every year, there are official visits and trade missions led by prominent individuals and organisations, including Luxembourg’s crown prince, the prime minister, the economy minister and Luxembourg for Finance, always strengthening the links between Luxembourg and China. Most people are aware of the role of Luxembourg in facilitating Chinese investment abroad – in Europe, but also in America, Africa and beyond. I see an analogy with Chinese medicine. The shop contains many boxes, and you receive a mix of substances from several of them to treat your health problems. Luxembourg also provides many boxes containing the tools with which you can create the best solutions for your strategy.
Which opportunities do you see ahead for the bank?
Today blockchain is used predominantly for payments. But increasingly, it’s being used for the transfer of complex assets. For example, blockchain makes it possible for multiple signatories, like a board of directors, to sign an electronic document simultaneously instead of having to transfer the document to each person and record the signatures in sequence - as currently two people cannot change a record at the same time. From the financial services industry to cybersecurity, the possibilities of blockchain are limitless. One of the key benefits of blockchain is its ability to eliminate agents or third-parties which act as go-betweens in transactions. Essentially, blockchain is a transparent, permanent record which eliminates the need for third-party institutions to minimize risk as the record exists in its own right and is easy to verify. What’s more, because this record isn’t stored on any one system but a network of millions of computers, this decentralized record is not only accessible to the public but it’s also very difficult for hackers to corrupt. Blockchain is only just beginning; time will tell just exactly how it will revolutionize the world.