What is “Blockchain technology”? A simple explanation.

All transactions with Guldens are entered into an electronic ledger in the cloud (the blockchain).  All users of a Gulden wallet make use of this software and as nodes form part of the Gulden network: a so called peer-to-peer network. They compile the transactions making use of cryptography to ensure the necessary security of the network.

All connected computers on this network have a copy of this ledger stored, making it practically impossible to carry out fraudulent actions with the data of the ledger. As for it to be true the majority of the ledgers need to agree. Through this process everyone can trust the ledger and there no longer is the need of an independent party (read: bank) to be involved. Gulden can now only be sold by its owner and can only be sold once.

The blockchain technology of the Gulden and lack of a central administration make it practically impossible for a government, or anybody else, to manipulate the value of the Gulden or create more inflation than has been intended. Initially it was thought that transactions would be anonymous. However it has now become clear that people that use cryptocurrency for criminal activity  are easily traced. This has been shown through research of the University of California in San Diego. Often it is easy to trace the identity of the user and white washing with digital currency is not as easy as it is with cash Dollars or Euro’s.

This post is also available in: Dutch

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