This article, authored by Cory Popescu was first published on the blog of the Society of Internet Professionals (SIP). SIP is a not-for-profit, Toronto (Canada) based International organization to connect, learn and share. Our Vision is to provide the opportunity to leverage technology to have an inclusive future for everyone. Since 1997, SIP has spearheaded many initiatives, educational programs, and networking events.
The past several years have been making the bitcoin, the first digital currency in the world, a rampant success. The reason for bitcoin and other cryptocurrencies existence is the overwhelming need to speed up, reduce fees and increase trust while performing online financial transactions across the entire world bypassing government control of currency.
The use of cryptocurrencies such as: ETH - Ethereum, BTC - Bitcoin, STQ - Storiqa, LTC - Litecoin, XRP - Ripple in the financial transactions would not be possible without blockchain which is the underlying leading software platform to support the single shared ledger, an accurate history of recorded transactions for digital assets.
Blockchain stores and transacts the cryptocurrency over the open and public networks. Blockchain has emerged as a dramatically improved platform to support financial transactions for the following reasons:
- Tamper-evident because a single shared online ledger allows accessing records of each transaction and which cannot be altered. If in error, it can only be reversed and viewed by all parties in the transaction.
- Transparency which means consent from all parties before the transaction takes place.
- Reduction or elimination of papers and overhead costs leading to cost efficient transactions.
- One-time recording a transaction viewable to all parties which leads to minimizing duration of financial transaction and increased efficiency.
Due to its novel features, blockchain presents essential benefits to enterprises:
- Distribution takes place over the open business networks, enables seamless peer-to-peer communication through sharing the single system of records among them by eliminating the need to reconcile multiple ledgers used previously by old systems to perform online financial transactions.
- Enables secured validated transactions because once all the parties consent to the transactions, they are recorded, validated and cannot be deleted by any party.
- Allows permission based on accessing rights of each network member to confidential information on a need-to-know basis.
Ironically, the blockchain benefits seem to display important limitations, such as:
- Restricted use because it is mainly designed for cryptocurrencies
- Open, public, anonymous meaning that anyone can join the network and view records, which results in breach of confidentiality and does not allow to know the identity of the parties in transactions.
- Significant computing power necessary to build highly encrypted software to overcome the limitations above-mentioned and stop forging activities.
During its blossoming years, cryptocurrencies and blockchain incurred wide criticism mainly due to the following factors:
- Price fluctuations –solution: new applications that lock the value of bitcoin to dollars, euros or gold
- Necessity to upgrade blockchain software as we similarly do for the software installed on laptops or iPhones.
- Possibility to be used by drugs or weapons dealers, smugglers although here the opinions are divided – see References below.
Meanwhile, over the time, cryptocurrencies continue to grow and so does blockchain showing that at least for now fulfilling necessities outweigh the issues related to using it. Broad opportunities arise from the use of blockchain and cryptocurrencies, on one hand and concerns, as well as the likelihood of government specific regulatory policies on the other hand. Although the current times foresee a triumph of this way of business and life, only the future will tell if the humans are willing to take charge to expand this crucial technology in a highly efficient manner while elegantly solving its limiting matters.
If you found this article of interest and would like to learn more, please consider attending SIP Talks premier panel discussion Wake up and Smell the BlockChain! on January 25, 2018 to explore what is blockchain and how it will affect your life....very, very soon!
Read more and register here: http://www.sipgroup.org/wake-up-and-smell-the-blockchain/
Blockchain: Bitcoin Developer APIs
Harvard Business Review: The Truth About Blockchain
Toronto Star: What you need to know about blockchain technology
IBM: Blockchain 101 Infographic
Newsweek: Bitcoin: Too Big to Fail
HM Treasury: Digital currencies: response to the call for information
thegardian: Bitcoin: UK and EU plan crackdown amid crime and tax evasion fears
Your comments are welcomed
Click on the links below to read the other articles by Cory Popescu:
How to Efficiently Set Up Priorities
Efficient Action Lists: Your Effective Time Management Tool
What are the Industries that Most Use Internet of Things?