Blockchain is a decentralized database that is shared and synchronized among the nodes of a computer network and operates without the need for a central authority. Instead of being locked within a single database, as is the case with centralized systems, files and information are diversified across the blockchain and made publicly accessible to as many computers connected to a common peer-to-peer network as needed. Data stored on the blockchain is virtually immutable, irreplaceable, irrevocable and available for validation at all times. The transfer of data over the blockchain network is called a transaction. A file that contains data related to a transaction is called a transaction file.

Blockchain performance is often directly correlated with the number of active computers (nodes) within the network and the number of validated blocks that hold sets of information. The more blocks, the better the data is protected, because more blocks are harder to forge. This solution may seem stable and sustainable, but it is far from perfect, mainly for the following reasons:

• Inadequate mathematical methods are used to validate transactions, which unnecessarily burden the entire blockchain system and make it more complex and expensive than it should be.
• The validation process is inevitably accompanied by a number of topics open for discussion, such as high costs, inability to record large amounts of data, environmental challenges, huge energy consumption, vulnerability to illegal distribution and sale, and more.
• Any violent action against the network and its infrastructure could potentially compromise the security and integrity of the data stored on the blockchain, while the credibility of the blockchain itself would be irreparably damaged.

The three neighbors have returned home and now want to enter their houses.

• The first neighbor has the key he brought with him, unlocks the door and enters the house normally.
• The second neighbor does not carry the key with him, but finds it under the doormat, unlocks the door and enters the house.
• The third neighbor has no key at all and cannot unlock the door. He calls for the help of a locksmith, who breaks the lock and the neighbor can now enter the house.

It is obvious that the first neighbor acts the most prudently, because he has the key that he carries with him. The second neighbor risks leaving the key under the doormat, which could also be found by someone else (say, see if he takes the key and where he takes it from) and enter the house. The third neighbor is behaving strangely and irrationally. Not only does he break the lock to enter his own house, but he acts as if he is inviting malicious people watching him to do the same.

The "house" we want to enter is the data we want to access, and the way we enter the house is the way we protect the data. The "key" we use to enter the house is the app we use to access the data. There are several scenarios of what this would look like in actual practice. 1 If we have the key and carry it with us, we'll be able to access data on our device through an appropriate app. 2 Another possibility is that we have a key, but we don't carry it with us, so we have to keep it somewhere else. It may be stored on a centralized database server, or it may be publicly available over a computer network, such as a blockchain. Now, the question is, where are the security guarantees? How can we be sure that the digital key will not be lost or corrupted for any reason? 3 And if we don't have the key at all, we'll have to "break the lock". This is the worst case scenario and there is no reason to even think about implementing it.

Just as we need to know how to access data, we also need to know how to protect it from unauthorized access. Even when it comes to data that does not require anonymity, it is necessary to disable changes to the files and preserve the authenticity and integrity of the content. This is, for example, what it takes to create and mint authentic digital assets (ADAs) or non-fungible tokens (NFTs). Otherwise, if we don't use the right software, it's like guarding a house that we can't lock (because we don't have the key). We would have to install video surveillance, build multi-layered armored doors, hire security consisting of several tens, hundreds, thousands of guards... In the digital world, the "gatekeepers" would be computers connected to a shared network.

With all of the above, it remains unclear why blockchain technology relies heavily on this second, far worse solution. Instead of using a single, simple application to store, secure, and authenticate data, files, and information, most blockchain networks are based on the principle of "the more complex, the more expensive, the better". Higher prices, however, are no guarantee of success, while complexity rarely improves quality. The complexity of the algorithms used in blockchain technology is not a reflection of the mathematical functions underlying these algorithms. On the contrary - it's a fairly simple formula of computing/validating hash values of all transactions in the blockchain, and most developers are familiar with it (a cryptographic hash represents an encrypted fixed-length value that identifies a given amount of data). Complexity arises as a consequence of overexploitation of these calculations. As a result, the effectiveness of algorithms is drastically reduced due to the fact that they are unnecessarily burdened with numerous, still unsolved issues (as mentioned in the first chapter). It is incomprehensible that some engineers persist in trying to force a solution within one and the same working environment, even though it is crystal clear that a disparate concept must be applied instead.

Digital Chip Card Technology, or DCCT for short, represents a set of innovative solutions implemented in security protocols and e-business systems that gravitate towards preserving privacy, confidentiality, authenticity and integrity of data and protection against misuse. Digital chip card technology has the potential to find wide application in the field of blockchain technology. At the heart of DCCT lies a digital chip card with an integrated virtual chip.

The process of authentication of a transaction file is autonomous and is based on the information embedded in the file itself, without referring to external links and sources. If the authentication of a transaction file were to be performed using data stored outside the file itself, there would be a serious risk of data manipulation. Thanks to the security mechanisms of digital chip card technology, which intertwine and complement each other, this risk is reduced to zero.

The blockchain created by digital chip card technology is not a virtual sequence of blocks or an avatar in the digital world, but an actual file available for download and online validation at all times.

The network that supports this type of blockchain is called DCCT Network. It refers to a basic blockchain unit with up to three devices connected to a common computer network, with the possibility of expansion into a chain of connected transactions called DCCT Network Expand. The blockchain (transaction) file is digitally signed and its content can no longer be altered, modified, damaged or misapplied, making DCCT Network a safe haven for all sensitive information and data that requires authentication.

Primarily designed for hosting authentic digital assets, DCCT Network is a blockchain system with up to three devices (nodes) connected to a common peer-to-peer (P2P) computer network. The device can be a computer, tablet or smartphone. Data transmission over the network is carried out by exchanging electronic messages in the form of digital telegrams. Compared to other blockchain systems that may involve multiple nodes in the chain (eg voting systems, supply chains, video streaming services, etc.), DCCT Network is a more innovative, productive, transparent, environmentally friendly and cost-effective solution. As stated above, there are (up to) three nodes that make up DCCT Network as the basic blockchain unit. Here's how it works:

• The first node in the queue is the one that initiates the transmission of the digital telegram (eg authentic digital asset (ADA) seller, payer's bank, cryptocurrency trader, digital video streaming provider, etc.). A digital telegram is therefore a transaction file, as it encompasses data related to transactions within the blockchain (DCCT) network.
• On other occasions, the second node would be considered the "central authority", but in this case it is only one of the nodes in the common network. In a way, this node can still act as a supervisor and mediator. For example, it can host an authentic digital asset or a message to be conveyed to the end user. It also serves as a remote database server, providing information about completed transactions at any time through a web app and cloud-based software running in the background.
• The third node is a digital telegram receiver. For example, the recipient can be an authentic digital asset (ADA) buyer, a payee bank, a patient in a healthcare system, etc.

A digital telegram transaction is considered final after all three nodes (devices) in the network have verified the data contained in the digital telegram. Using the same data verification software, the three nodes make decisions completely independently of each other and inform each other of the outcome of the verification. If the transaction data from any of the three nodes becomes unavailable for any reason, temporarily or permanently, it is still available for validation in the remaining nodes, even if only one node remains. The stability and functionality of DCCT Network are not subject to external influences, nor do they depend on changes within the system. The files and metadata stored on DCCT Network cannot be altered, forged or removed, which makes this platform suitable for transmitting confidential, encrypted information and guarantees the preservation of the authenticity of the digital assets hosted over there.

Sometimes it is necessary to construct the blockchain as a chain of interconnected transactions. In this way, the authenticity of the files containing data on those transactions would be ensured and their integrity would be confirmed. Here are some examples:

• transactions governed by the same digital currency;
• transactions within the same financial institution;
• online voting, i.e. remote electronic voting via the Internet;
• online audio and video streaming services (the possibility of falsifying the number of views would be minimized);
• the supply chain of a particular store, with no product left out of the chain;
• in healthcare, when monitoring the course of the disease, where all observed parameters are interconnected;
• Digital Rights Management (DRM) service;

and many others. DCCT Network can be easily transformed into a chain of interconnected transactions thanks to the blockchain file structure and custom algorithms designed to enable this feature in the first place. The multi-node network is called DCCT Network Expand and is composed of more than three (typically, many more) nodes connected to a common peer-to-peer (P2P) computer network. Validation of such a system is quite quick and simple. The procedure is transparent and understandable, while the content of each of the files in the chain can be read both online and offline. Instead of verifying a single block of data, as is the case with DCCT Network, here with DCCT Network Expand we have to verify multiple blocks of data, where each block in the chain depends on other blocks in the chain to be verified. The memory capacity of one block in the chain is up to 1MB.

A smart contract is a computer program running on a blockchain that is automatically executed upon meeting pre-defined terms and conditions. It relies on a binding agreement between two parties presented in traditional paper or digital form. A smart contract is made up of "if true then [do something] else [do something else]" conditional statements embedded within the transaction file, with outcomes dependent on whether or not predetermined conditions are met and verified. For example, a fairly simple smart contract for our website would go like this: #IF (you agree to use blue2digital.com in accordance with the terms and conditions)

[you can use this website]

#ELSE (you do not agree to use blue2digital.com in accordance with the terms and conditions) The execution of a smart contract initiates the completion of a transaction and the update of a transaction file represented by a digitally signed block of data, which is then stored on each of the nodes that make up the blockchain network. The transaction file can no longer be reversed, modified, corrupted or misused.

Let's study the case when two parties participate in negotiations regarding the conclusion of a certain deal. They can negotiate physical assets such as traded commodities, gold, real estate, artwork, or digital assets such as ownership rights, digital art, license agreements, loan applications, and more. In order for the negotiations to be successfully completed, first of all, a contract must be prepared with terms and conditions that both parties will be familiar with and agree to. We'll call it the actual contract. The actual contract is drawn up either in paper form, which is signed with traditional, handwritten signatures, or in digital form, which is accepted electronically, usually by ticking the appropriate checkbox within the app or website. #Events occur in order as follows:

Here's what can be checked before a smart contract is executed and a blockchain transaction is considered complete. We can check whether:

• the conditions for the transfer of funds are met;
• the conditions for payment of royalties are met;
• digital currency banknotes are valid;
• the conditions for selling or renting the property are met;
• the patient treatment procedure was followed;
• the food supply chain is sufficiently transparent, etc.

When we talk about the benefits of smart contracts, we are actually talking about the benefits of the entire blockchain and related high-performance technology solutions. A smart contract is an integral part of the whole and cannot be discussed in isolation from other components of the blockchain ecosystem. Without a smart contract, we would not be able to initiate, monitor or complete a transaction, and we would not know whether the conditions under which we agreed to be participants in a transaction within the blockchain network have been met and verified.