I recently read an article about Blockchain created by the Harvard Business Review and thought it to be very interesting. It inspired me to do some research regarding the beginnings of this technology and what the future might hold for all of us. I created this article containing key knowledge that everyone interested in cryptocurrencies should know.
Blockchain is a digital ledger which is used by bitcoin and other cryptocurrencies in order to recorded transactions chronologically and publicly. Comparisons are often made between blockchain and TCP/IP. TCP/IP is the set of rules that connect computer systems to the Internet, which enabled bilateral email messaging. This would now meet its contemporary equivalent blockchain, that will go on to power bilateral financial transactions.
Prelude
Initially, the idea was first introduced by a person known only by their pseudonym: Satoshi Nakamoto. He or she wrote a paper called Bitcoin: A Peer-to-Peer Electronic Cash System, where a groundbreaking concept was discussed. Simply put the paper suggested ‘A purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution’.
Many people found this concept revolutionary, however, the resources needed to pull this off were staggering. In order to maintain the blockchain a massive amount of processing power is needed and back when this paper was introduced there was no computer that could do that.
However, shortly after the paper got published, Bitcoin was born. Bitcoin is a cryptocurrency in which encryption techniques are used to regulate and verify the transfer of funds, operating independently of a central bank. In order to overcome the issue of a lack of processing power, Bitcoin used the computational power of thousands of computers around the world, offered to them by willing individuals and in exchange these people would receive a certain amount of money in bitcoin. This is more commonly known as Bitcoin mining.
The first Bitcoin was mined by none other than Satoshi Nakamoto, which back then was rewarded with 50 bitcoins.
Where is Bitcoin Right Now?
When anyone tries to speculate the future value of bitcoin, you must always take it with a grain of salt. Bitcoin is probably the most volatile currency there is right now, but its growth has been explosive. In the recent weeks, Bitcoin has reached an all-time high of $8,268. The chart below shows the lifetime value of Bitcoin and you can see that only this past year it has broken every single growth record there has every.
Many people say this is a bubble and it will burst soon and others say that it will continue to grow, whatever happens keep your eyes peeled because the value of Bitcoin can change in instant.
Where Can You Use Bitcoin
As Bitcoin’s power grows, many businesses have taken notice of it and have decided to sell there goods and services in Bitcoin. The most extreme example of which is the Bitcoin Lamborghini, where Peter Saddington used Bitcoin to buy his dream car. He originally bought Bitcoin in 2011 at the price of $2.52 and had kept it till he amassed a small fortune.
Bitcoin Vending Machine
Have you ever been in a situation where you needed to turn your cash into bitcoin quickly? Don’t worry because now in many cities around the world there are physical machines that can take your money and transfer it to your preferred cryptocurrency.
This was one of the first Bitcoin ATMs in Tokyo that was able to take Japanese Yen and turn it into Bitcoin instantly. Behind, the machine is a bar where you could use the Bitcoin you just got, to pay for your drinks.
Food Delivery
Thuisbezorgd.nl is a food delivery service in the Netherlands that will deliver food from your favourite restaurants. They accept Bitcoin as a payment option.
Future of Blockchain And Bitcoin
Bitcoin will rise and fall for the next coming days, weeks, months and years. 2017 has been a hell of a ride for people interested in cryptocurrencies. All I can say is buckle up for 2018 because it might get crazy.
Blockchain, on the other hand, has a more concrete future. Often Bitcoin and other cryptocurrencies are offered up as the main use of blockchain, however, it is only one of the applications of blockchain. Companies around the world are adopting this technology in order to increase their efficiency and add value to customers. An example of this is that Blockchain is being used internally by companies as a database for applications like managing physical and digital assets, recording internal transactions and verifying identities. This is a useful solution for companies struggling to reconcile and maintain multiple internal databases.
Blockchain is a transformative application that if used successfully could change the very nature of economic, social, and political systems. These could be the major tech companies of the next generation or could even create entirely new industries, patience is required to realize such opportunities. Though it may be early to start making significant investments in them now, developing the required foundations for them is tremendously important and could be very lucrative.