Blockchain and Cryptocurrencies
The Bitcoin History
Surely we’ve all heard of cryptocurrencies by now. Bitcoin, one such currency, is by far the biggest and has been around since 2009. It is a decentralized form of currency, meaning it is managed by many entities and not one central hub. It also doesn’t require an identity, providing the ultimate privacy in transactions.
The article touches on Bitcoin, but more specifically the blockchain it utilizes. In short, the blockchain is a secure ledger that records any and all transactions and protects them from hacking or change. The reason this is revolutionary, according to the article, is because it eliminates the need of a middle man to transact — anything. Cars, stock, money, medicine, did, etc. It’s potential to destabilize the monetary market as we know it today appears to be very real and people are still trying to figure out how to come to grips with it. Take a look at the video below to become more acquainted. This should give you a better idea around the blockchain technology.
Bitcoin in Society
I personally believe cryptocurrencies to be a massive disruptor in our day to day transactions. Everything you do today requires a middle man. You want to buy a product, you typically hit Amazon or eBay, etc. Buying stock, you use a brokerage. I’ve always been bothered by the fees banks or brokerages or whomever charge simply to facilitate the transaction. Not to mention many products have built in fee structures the more the middle man is involved (think wholesale vs retail). If the blockchain continues to be a source of integrity and record keeping, it truly has the potential to explode the peer-to-peer interactions of our everyday life without the middle man.
In fact, I’m not the only one to believe such things. Companies such as Facebook and Amazon are taking hard looks at both cryptocurrencies and blockchain technology implementation. Moreover, you can look to countries such as South Korea and China as trailblazers in the crypto-markets. It’s been near impossible to track the frequency at which these examples are popping up all over the world. If you are truly interested, check out this post regarding some of the more recent uses of the technology.
Separately, I find this to be an interesting investment going forward. Digital currency is not going away. In fact, I do believe it becomes more relevant as AI (smart homes, self driving cars, robots) continue to take hold in our society. Purchasing will be more automated with less physical transactions. That’s obviously the beauty of a digital currency because it occurs across a wire. So while price fluctuations of say Bitcoin are currently outrageous, in the long run, folks will want to own this currency in some fashion as another financial option.
Lastly, I’m fascinated by the security of it all. As the article states, the blockchain lives across MILLIONS of computers and machines. The only way to alter the ledger is to have the majority of machines agree on a change to the blockchain. It is virtually impossible given the complexity of the algorithms you would have to solve in real time to make this even possible. So while a big bank by itself could be hacked or it’s servers crash and your account and identity stolen, the blockchain idea is like thousands of big bank entities all suffering a systemic failure at once (the odds of which are beyond astronomical). Plus, your identity protection is real using the blockchain. In fact, it’s already going on today in companies like Civic. The potential of this stuff is incredible. So while this article may only be touching the tip of the iceberg, the implications are far reaching over time for the average person.
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