BUY-IN: HOW BLOCKCHAIN IS BE­ING USED AL­READY

THE (Times Higher Education) - - NEWS -

Cur­rency

The most well-known use of blockchain so far is to un­der­pin the dig­i­tal cur­rency bit­coin. Cre­ated in 2009, the price per bit­coin – each unit is in ef­fect a unique num­ber that re­quires tremen­dous com­put­ing power to cre­ate, which makes it scarce and thus pre­serves its value – has now ex­ceeded £3,000, al­though there is no short­age of an­a­lysts pre­dict­ing a crash. Bit­coin trans­ac­tions are recorded on a blockchain, mean­ing that bit­coin is out of the con­trol of any na­tional gov­ern­ment or bank. As such, it is seen as a cheaper, fee-free way of trans­fer­ring money around the world.

Banking

In some ways, blockchain tech­nol­ogy could be seen as a threat to banks as it re­moves the need for a trusted mid­dle­man to han­dle trans­ac­tions – one of the key roles of a bank. Peo­ple who are not ac­cepted for a bank ac­count could still carry out dig­i­tal trans­ac­tions, us­ing a cur­rency such as bit­coin, for ex­am­ple. How­ever, banks have taken a keen in­ter­est in the new tech­nol­ogy to see how they can use it them­selves. Ear­lier this year, IBM an­nounced that it was build­ing a blockchain sys­tem for a con­sor­tium of seven banks to make it eas­ier for small busi­nesses to trade in­ter­na­tion­ally. Oth­ers hope that by re­duc­ing the cost of send­ing money on­line, blockchain will al­low tiny pay­ments, al­low­ing read­ers to pay a few pence to read a news­pa­per ar­ti­cle, for ex­am­ple.

Crime

Blockchain also al­lows users a cer­tain de­gree of anonymity when us­ing bit­coins to buy things, mean­ing it has been as­so­ci­ated with crim­i­nal ac­tiv­ity on­line. It was one of the ways that users bought drugs from the Silk Road, a kind of eBay for banned items, be­fore the site was shut down in 2013 after the ar­rest of its founder. On the flip side, oth­ers see it as a tool that could help com­bat money laun­der­ing, as it cre­ates a pub­lic, per­ma­nent record of trans­ac­tions that reg­u­la­tors can in­ves­ti­gate for dis­crep­an­cies with rel­a­tive ease.

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