Since the introduction of Bitcoin and the wonders of Blockchain by Satoshi Nakamoto into the world of Cryptocurrencies, Bitcoin has ever been in the news, and its price presently increased to a new height now. From the beginning of the concept of Bitcoin, there were assumptions that the cryptocurrency might not be sustained for a long time, especially in a world of laws and orders, and where a centralized system of banking persists. But contrary to this, Bitcoin has skyrocketed and broken its own very records, when it was announced that Bitcoin rose to close to $20,000 towards the end of last year.
Unlike in other investments where a sudden drop would force investors to pull out and sell their stakes, investors in cryptocurrencies would rather hold onto their coins. A popular term called “HODL” in the crypto-world.
Early investors underestimated the value of bitcoin, calling the entire system a mere bubble that would soon burst. However, those who trusted in it proved them wrong, as it’s price rose in value.
How Perfect is Bitcoin?
Bitcoin is not a perfect currency because it comes with its many limitations. As the number of transactions increases on the blockchain, pressure increases, pulling down the entire system. Bitcoin miners are therefore faced with a humungous challenge of either increasing the blockchain size or reducing the number of transactions per block, so as to enhance the overall speed and efficiency. However, this would also increase the number of challenges – causing centralization of currency, which miners are seriously worried about. By increasing the blockchain size or reducing the number of transactions per block, only miners with bigger computing powers would be able to make profits as fees per transaction will be drastically reduced and small miners will suffer.
The world of Cryptocurrency – Tending Towards a larger fall or a greater rise?
So with all said, what Bitcoin and cryptocurrency in general holds for the future is something that only time can tell. Nevertheless, one thing is very sure, that there is a high tendency for cryptocurrency to rise in future. This is because every facet of business is employing blockchain into its operations to retain their investors and to heighten their security. If a business continues in an old-school way, there is a tendency that in future, its investors might drift to their rivals who have adopted the blockchain technology in their operations. Therefore, blockchain is indeed the technology of the future, but with the rise of permission blockchain first developed by the JPMorgan Quorum permissioned blockchain protocol, the world of cryptocurrency may not tend towards a greater rise as predicted.
Blockchain is not only Bitcoin, it’s much more than Bitcoin
Aside from the positive impact that blockchain technology can have on the society as discussed earlier, there are other numerous areas where blockchain technology can have a useful impact. Some examples include:
The ability to track foods from farm to shelf is one that has recently made the news. IBM announced that it has begun working with the larger food suppliers, including Nestle and Walmart, to take advantage of blockchain technology. Of particular interest to food, suppliers are being able to identify the source of food contamination, as well as being able to track the producer within the food supply chain. Beyond food, the transparency of blockchain can also give consumers the true source of manufactured goods, which has become important in today’s society.
The trading of energy with the use of blockchain could allow the consumer to sell excess energy to their neighbors, removing the control from the utility companies. Similar to financial markets, there may even be a range of prices as supply and demand dictate price.
Governments have already begun pilot projects to incorporate blockchain technology into their daily operations. The intention being to make the efficiency gains that the technology can deliver. In the UK, the government has used blockchain technology in the disbursement of student loans and also to track the payment of benefits to the underprivileged. The government’s view is that blockchain could reduce corruption, the number of fraud cases and costs by shifting away from the current use of paper.
Elsewhere, governments are looking to use the technology for record keeping, including land property deeds. The use of the ledger could, in fact, be used to record the transfer of titles and deeds of property.
The removal of the paper trail in the healthcare system and making patients’ medical records are available to the patients without the threat of hacking or leaking. Additionally, a decentralized ledger of medical data may even be able to provide the necessary data points to support the fight against virus and disease.
Protection of rights and distribution of earnings within the music industry is a key consideration, as the industry looks at ways to adopt the technology. Removing the ability for piracy and allowing listeners to download music stored on the blockchain, paying for the music with cryptocurrency would be one of the paradigm shifts in the industry. It would also mean that the right people get paid… It may well be the death of distributors, but it’s unlikely that artists within the industry will lose any sleep over such a prospect. Blueprints have already been published in a decentralized blockchain ledger that is expected to solve the issues of rights and payments.
The first artist to engage cryptocurrencies in the music industry was Bjork with a release of a new album that provides buyers with 100 Audiocoins.
These are just a small number of examples. Blockchain technology is being explored across all of the major sectors and with many industries already rolling out pilot projects, the skeptics may have to eat their words.
The truth remains that though many see Bitcoin as a currency, the surge in Bitcoin’s value may well have as much to do with the blockchain technology than the cryptocurrency itself.