When a new technology is invented it go through various phases.
From being ignored to getting ridiculed then accepted by the mainstream. Blockchain is one of those inventions. Looking at its sheer design and technology you can tell that nothing can stop it from getting into our day to day life.
“First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you." ― Nicholas Klein
Today we’ll see how blockchain is changing our world and why its the next big thing after Internet Revolution.
In 21st century majority of folks might have heard about blockchain. Even if you didn’t Elon Musk tweets might have made you curious about this new thing. Let’s understand what makes blockchain so interesting…
First let’s understand these two terms bitcoin and blockchain.
Bitcoin is a digital currency that doesn’t have a physical form. Nevertheless, it is widely used for transacting online, similar to any other physical form of currency.
On the other hand Blockchain is a technology that stores data related to each Bitcoin transaction in a block that is linked or chained to previous blocks that hold information about transactions. Simply put blockchain is the collection of blocks (data) linked together in a chronological order.
Now that you know Blockchain is a technology same as Internet was once upon a time. While Bitcoin is just a product build using Blockchain technology same as a website or app in the world of Internet. Let’s see how blockchain gets originated…
A brief history of Blockchain
Blockchain origin dates back to the financial crisis of 2008. It was the result of failed banking system and government who couldn’t keep up with the faith of its people’s on their hard earned assets. This crisis unveiled the inherent shortcomings of banks and other financial institutions.
These shortcomings were:
No direct control of people over decisions that is going to give value to their money.
Central authorities behaving irresponsibly with all the money of its people.
When people put their money in banks, they lost their customers money and as a firefighting measure, the Government printed more money which in turn reduced the value of money already in circulation. Since there isn’t a cap to the maximum amount of money printed by the Government, lots of uncertainty surrounds value of paper money.
In a volatile country, people of the country suffers the most from the irresponsible behavior of its government and banks.
After this crisis people started looking for an alternative to keep their money such that it would not be controlled by a central authority.
Bitcoin solved this problem by fixing the maximum number of Bitcoins to be printed ever. The maximum number and the rate of production cannot go beyond the set limit because of the coding used in its design. Also, to ensure that no more Bitcoins are produced, the code is visible to everyone for verification.
For simplicity you can compare blockchain with banks and bitcoin with paper money. The value of bitcoin depends solely on its demand and supply. Where the blockchain technology holds the responsibility to keep the value of bitcoin safe and immensely hard to destroy or meddle with.
Bitcoin is just a product build on top of blockchain technology. The algorithm is designed such that it keep the total number of bitcoin fixed and incentivize the early adopters with its rate of new bitcoin production which keeps decreasing with time.
The total number of Bitcoins that could ever be produced is fixed upto 21 Million and that too by the year 2140. New coins are released at a rate that keeps decreasing by every 4 years. This means that as the number of Bitcoins increases, the number of newly created Bitcoins would decrease and new creation would become rarer. Since its value is dependent only on the supply and demand in bitcoin market it's free from all kinds of Government interventions.
Blockchain: The next big thing
As we are entering into future, there is a constant need for a technology which can eradicate the dependence on a middleman and central authority where the weakness and mood swings of an individual can put the whole country at risk like the one happening now in Afghanistan, Pakistan and their allies. These intermediary forces eat up the majority of value that should get created when there are no middleman and authority and things take care of themselves end to end.
When government and banks are no longer worthy of its people’s faith, the adoption rate of a technology without a central face and power become faster. Various volatile government stricken countries like Afghanistan, Venezuela, Brazil, Turkey, Argentina, Sudan, Angola, Venezuela, Pakistan, and Zambia are seeing a huge promise in Blockchain technology because it’s not in control of their country’s leadership powers. This led to high adoption rate of Bitcoin in poverty stricken high inflation rate nations.
“Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.” - Vitalik Buterin
When Internet came it distributed the concentrated power of knowledge and access to an global audience. Also it was the same Internet which put lots of successful companies out of their business when they couldn’t adapt and innovate to the changing needs of their audience. Fast forward to today where we can’t even imagine a day without internet.
Blockchain is promising a similar future as Internet did in 1990’s , rather it is a feature enhancement to the distribution powers of internet by making Internet free from all kinds of central forces and government censorship’s.
Blockchain added internet will lead to an era where big giants like Google, Facebook, Microsoft, Apple will no longer be in control of what’s being displayed on yours feed and sell advertisements to you.
Today these digital giants are shaping majority of public opinions and ideologies as per their welfare and needs without you and me being aware of it. They are capable of shaping global trends and make any thing they could benefit from a talk of the globe. Together these digital giants can control more than 95% of all the votes and opinions hence they have more than the required power, which is dangerous. This often leads to serious clashes like the one with presidency candidate trump in US Election and the recent one with new Kisan bill in India.
Blockchain shows the potential to decentralize power among its users. Some potential application of Blockchain is other areas are:
1. Banking
Blockchain is replacing and overtaking current banks at rapid pace. If this continues it can cut down 19.8 Billion Dollar which is going for banks as middleman cost/year. It will make hacking accounts and double spending impossible making a more safe bank.
2. Healthcare
In healthcare blockchain is used to store the details of patients. This ensures that only people with proper access can see the patients data, this makes the database highly secure.
3. Voting
Blockchain can be used in Voting because of its revolutionary unchanging nature. With bitcoin votes will be more secure and fail proof.
4. IoT(Internet of Things)
The blockchain is also now used by IoT. This ensures that data which is going to transfer over or between the devices will be secure and encrypted without any interference.
5. Online music
Blockchain is good for any royalty based products and music industry is the one which shows promise to get benefited by it the most. With blockchain artists can get directly get paid and control their distribution without any band.
6. Real estate
Real estate is also a domain which is largely controlled by banks and government, with blockchain now people can sell and buy the property over blockchain without any intermediary.
7. Cybersecurity
Blockchain is a huge add on to cybersecurity. It helps in providing the secure transfer of data. Making information more secure and private which cannot be modified without proper authorization.
The applications of Blockchain is enormous.
You can see the high adoption rate in security prone sectors like banks, crypto, healthcare, royalty, retails and so on. These are just some of the early adopter but there is more to this. All I can say is, its just getting started and more than 95% of its potential is yet to be explored.
Almost every industry is going to be affected with Blockchain and its potential benefits. The only problem is energy required to keep the technology running. With so much potential benefit I am rooting that it gets resolved soon to be able to reap the benefits in a more equal and secure world.
That’s it for this week
Until Then
Stay Hungry, Stay Curious
Sneha Prajapati
Great article