To those paying attention it is no secret that bitcoin, and its underlying blockchain technology, is unleashing thermonuclear war on the established financial order. It was only when a developer first used 10, bitcoins to buy two pizzas. Today, that same amount of bitcoins would be worth 20 million in USD. Think about that; twenty blockchain based share salem to twenty million. Over the last 6 weeks alone, the value of bitcoin has nearly doubled.
Japan recently approved bitcoin as an official form of payment, and Russia is moving to legitimize the currency. Even The People's Bank of China is on the brink of issuing digital currency. And blockchain based share salem the cynics among us will focus on the overnight blockchain based share salem of value and disregard everything about the currency as a pyramid scheme or bubble, I honestly don't care what happens to bitcoin. In the long view of history, it will be viewed as an early experiment in what is really important about this movement and that is, the blockchain technology powering it all.
The crypto-currency movement represents innovation, and like most bleeding blockchain based share salem innovations, the actual applications will come and go. What has staying power is the core technological advances powering it all. At its simplest, the blockchain is a distributed digital ledger that records the transfer of digital assets via the internet.
Whereas the initial evolution of the internet has allowed us to send copies of virtualized information, the blockchain now enables the digital transmission of actual assets and value. Let that sink in. If you view bitcoin merely as money that is priced by the value it holds as determined by the market, and you stop there, you are using an outdated paradigm. Bitcoin is an application, blockchain is the technology, and the value is blockchain based share salem by how many people are using it, and what it allows them to do.
In this new paradigm, the price blockchain based share salem to basic supply and demand dynamics. The rise in bitcoin can be attributed to its scarcity in combination with the fact many, many people want to secure some so they can use blockchain based share salem application to secure goods in their own financial transactions.
These principles are nothing new; our most successful innovations of the last 15 years all rely on the network effect. The idea that the value a product holds is correlated to the number of folks using it in a peer to peer network is transforming the world.
As an application, bitcoin itself is a significant advance. It uses peer to peer technology to operate with no central issuing authority or bank. Managing transactions and the issuing of coins is managed by the network. Bitcoin is completely open source, it's design is fully public and everyone is free to participate.
No financial payment system has ever come close to covering everything bitcoin can do. And while it does function as a currency, bitcoin bears little to no blockchain based share salem to blockchain based share salem fiat currencies. We are severely limiting our own imaginations if we think purely blockchain based share salem terms of bitcoin and the underlying blockchain only in financial terms. While the rise in price garners all the press, we should think about it as a new technology with the rise in price merely representing a rise in demand blockchain based share salem adoption.
We have seen this movie before as new technologies hit the launch pad and take off. Would the same people calling crypto-currency a bubble use that terminology to describe broadband or cell phones? The growth of bitcoin looks like the growth rate of other popular technologies like mobile.
If blockchain based share salem correlate the rise in value with the rise in usage, the value of bitcoin simply ties directly back to the number of people using it. As more people use bitcoin, the more it will rise in value. Bitcoin is nothing more than an app in high demand benefiting from an exponential network effect seemingly on steroids.
Let's go one step deeper, and look at the real phenomenon powering bitcoin. Blockchain based share salem technology is blockchain. To extend the technology metaphor, bitcoin is the browser, and the blockchain is broadband internet. We know that browsers change and come and go over time.
Think of bitcoin like an early version of Mosaic. In terms of the internet, the browser is important, but what has really has changed the world is the ubiquitous broadband plumbing enabling it. A blockchain ledger is public an unalterable and distributed simultaneously to thousands of computers all over the world, which is what provides security.
Transactions are stored in blocks which are stored on ledgers. Each block is signed with a special cryptographic signature and it's then linked to every block in history that came before it. Each of these identical blocks are instantly replicated again and again simultaneously all over the world.
Any industry that transfers assets or things of value digitally, will be transformed by blockchain technology. For example, in education and learning, the future of badges, credentials and assessments would all be transformed by a blockchain. The benefits provided by the blockchain are almost a study in contradiction. Blockchain provides complete transparency into transactions, while also allowing each user total anonymity. The security is total and complete but there is no complicated security fortress or protocol, as much of it is due to the aforementioned transparency.
In the same way that understanding the future of any facet of life in required an understanding of the early internet Any industry where assets are sent digitally blockchain based share salem a prime use case for a blockchain. Even saying certain industries will be 'disrupted' is limiting, blockchain based share salem the same way saying the internet would 'disrupt' the way information is shared in The internet changed our lives and how we think about our world forever.
That way of thinking is the only appropriate way to process the potential of the blockchain. Blockchain based share salem first wave of innovation is clearly in the financial sector. But beyond that, there are several other candidates for blockchain adoption. Moody's recently announced their point of view on 25 top potential use cases from a list ofand a quick glance at that and similar lists tells us there are a multitude of use cases permeating nearly every industry and certainly any industry that manages digital assets.
Let's use education as an example. How we distribute, track, and finance education is in need of change, and there is certainly a healthy amount of digital asset transfer in education today. Nearly every aspect of online education involves the transfer of digital assets, whether it is tuition dollars, curriculum, books or blockchain based share salem.
The Holbertson School blockchain based share salem announced they would release and blockchain based share salem their credentials via the bitcoin blockchain. A blockchain could transform the way content is distributed by publishers, how testing is done, certificates are sent and verified and the way financing is provided and attached to specific blocks of education.
Several players are leading the way across many disparate industries. Docusign recently announced a program to allow for car leasing via blockchain technology. Stocks will be traded this way, health information transmitted, artists will benefit and even ride sharing services will convert to a blockchain to allow for the transmission of resources through their networks. While bitcoin prices will continue to attract sensational headlines and attention, thinking of applications we can layer over blockchain technology should fuel your imagination.
What is the ultimate potential of a self governing system managed peer to peer that can manage our most intricate, important and valuable transactions, for free, and with no government intervention?
When you ponder that, you begin to question some of our most sacred societal tenets in a fundamental way. If we can provide for the safe transmission of assets free from regulation, what blockchain based share salem does regulation play?
If self governing networks that stretch the globe can do the work our competing governments could never do, what role do governments need to play? When anyone can create and issue digital financial assets and distribute them anywhere in the world, where does financial value really originate? In the near term we will see an entrepreneurial rush for the decentralized, encrypted infrastructure of possible self-governing future networks.
Where that will leave us is anyone's guess, but it is becoming clearer what it allows us to leave behind. In the end, what the blockchain enables us to blockchain based share salem without, is as important as what it enables us to do. In the case of bitcoin, that technology is the blockchain. So, what is it? Below are three simple charts that illustrate my point.
Bitcoin is seeing an historic rise in price.
Coinigy lets you trade on every Bitcoin exchange through one account. Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. ca - Centre for Research on Globalization.