New Kid on the Block
Blockchain is a new development in the world of technology and promises a multitude of uses, from crowdfunding to governance.
Blockchain” has become something of a buzzword bandied about by those in the know. But what is it, what can it do, and why should we give a hoot? In layman’s terms, Blockchain is a set of codes and algorithms where each “block” in the “chain” is derived from the one before it and gives rise to the one that follows. Each block is unique, carrying its own “DNA”. Due to this DNA sequence and the fact that all transactions along the chain are recorded, Blockchain will show when a transaction on a cryptocurrency (such as Bitcoin) was completed. This DNA cannot be altered without corrupting an entire chain, which makes it unlikely that criminals will attempt to alter or hack Blockchain, thus making it very secure and highly reliable. In fact, Blockchain has been described as an “incorruptible digital ledger of economic transactions” that can be “programmed to record everything of value”. Moreover, it is transparent and open for public view – Blockchain cannot be used to hide anything. Currently, Blockchain is principally used to verify Bitcoin spending, though it has enormous future potential.
Bitcoin is another word that has the world all a-flutter. In short, Bitcoin is a computergenerated digital currency created and held electronically. It is produced by people and businesses, running computers all around the world, using software that solves mathematical problems. Bitcoins are “mined” using computing power in a distributed network. This network also processes transactions completed with the virtual currency, making Bitcoin its own payment network. As opposed to conventional currency based on gold and silver, Bitcoin is based on mathematics. People use opensource software programmes which follow a mathematical formula (freely available, so that anyone can check form of currency.
Bitcoin was first proposed by software developer, satoshi Nakamoto, who had the idea of producing a currency that was independent of any central authority, transferable electronically and more or less instantaneously, with low, if any, transaction fees. Unlike other currencies, Bitcoin cannot be printed and operates as a cryptocurrency only – it is used to buy things electronically and is traded digitally. The most important characteristic of Bitcoin is that it is decentralised, meaning that it is not under the control of any one person or institution.
According to the rules that make Bitcoin work (known as the Bitcoin Protocol), only 21 million Bitcoins can ever be created by miners, although these coins can be divided into smaller parts, with the smallest divisible amount being one-hundred-millionth of a Bitcoin, called a “satoshi” (named after Bitcoin’s founder). The total value of the currency is currently close to Us$9 billion.
Many are wondering whether Blockchain might evolve into the new Internet. lorien Gamaroff, founder and CEO of Bankymoon, a software company focusing on Blockchain technologies, believes that Blockchain is going to be a “massive disruptive force”. “This is the next revolution, the next Internet, if you like. It is not an understatement to declare that a new technological revolution is upon us.”
Indeed, Blockchain does have enormous potential future uses, as it gives Internet users the ability to reliably authenticate digital information. Various uses have been identified for the technology, including smart contracts, crowdfunding, supply-chain auditing, governance, the sharing economy, and file storage. Smart contracts will do away with third-party involvement, allowing the rules agreed on by participants to be it) to produce this autonomously enforced. say, for example, you and your pal bet on the outcome of a rugby match. The agreement will say that if you win, you will get paid the reward and if your mate wins, he will get paid. The rules will be entered into the smart Contract and, depending on the outcome, the winner will be paid directly. There is no need for third-party involvement. This is a simple example, but consider the implications for industries heavily reliant on contracts and the enforcement thereof.
Crowdfunding initiatives such as Kickstarter and Gofundme are doing great work for the emerging peer-to-peer economy. They are ushering in a new paradigm of economic cooperation, while demonstrating that people want to have a direct say and a direct impact. Think, too, about instances where you buy a product that makes impressive claims about its ethical origins (think diamonds, or any fair-trade item). A supply chain that is kept on Blockchain will offer an easy way to certify its alleged backstory. As far as governance is concerned, think of the potential effect that full transparency of elections or other kinds of poll-taking could have. There is already an app, Boardroom, which enables organisational decision-making to take place on Blockchain, meaning that company governance becomes fully transparent and verifiable.
Gamaroff has predicted that, as more merchants and service providers start accepting Blockchain and Blockchain currencies, people will gravitate towards it. “This is the next technological revolution. one that will take us into a future we can scarcely imagine.”