Thursday, September 17, 2015

Why Everybody Cares About the Blockchain

In a world where people can have virtual relationships, it is no surprise that virtual money exists as well. Virtual money, otherwise known as Bitcoin, is reliant on the blockchain. The blockchain ensures that Bitcoin remains safe; it makes sure that people can not erase transactions after completing them.
            “ ‘Wouldn’t it be awesome if we had one universal ledger that we could use for everything and that was accessible to everybody?’  said Jerry Brito, executive director of Coin Center.” The blockchain is exactly this. The controversy with this, for some people, is that it is not centralized, unlike other ledgers and databases. Personally, I believe that it is a good thing that the blockchain is not operated like other ledgers because they are reliant on their owners to operate them. Due to the lack of centralization, the blockchain accepts direct transfers. This eliminates the middle man: the bookkeeper.
            This past May, Nasdaq stock exchange decided to try the blockchain for its private-markets platform. This allows companies to trade private shares. If all goes well in this ‘test run’ for Nasdaq, the blockchain will be used for other platforms as well. In addition, Nasdaq using the blockchain gets the word out to other organizations who may benefit from using the blockchain. Someday, the whole world will be reliant on the blockchain to keep track of their Bitcoin, among other things.
            Not only is the blockchain convenient, but it is also cheap to operate. This means that not just businesses can benefit for using it; everyone can. It is believed that someday people who do not possess bank accounts, will keep track of their money on their smartphones using the blockchain. Does this mean that someday paper money will no longer exist, and everyone will just keep track and have their money on their phones and computers?
            Though this article was very informative for people who already had a basic understanding of what the blockchain is, it lacked a good explanation of the blockchain. It gave a brief overview of the blockchain, but I ultimately had to research more to completely understand just how the blockchain operated. In addition, the article did not clarify that the blockchain can be used for more than just Bitcoin. It jumped into telling the reader how companies can use it for trading shares, after first saying that it was using for Bitcoin. When I first read it I believed that it was solely used for Bitcoin. The article mentioned how the world could someday benefit from the blockchain, but it did not provide a good explaination of what the world would be like when reliant on the blockchain.
            The blockchain is a very convenient and cheap way for Bitcoin, among other things, to be held account for. I cannot wait to see what future opportunities this technology provides for the world.

1 comment:

  1. One thing I think you may missed in this post is the ever growing size of the blockchain. After every transaction is completed, the transaction is recorded and verified by one of thousands of nodes around the world; however, a new hash value will always be tacked on to the tail of the blockchain, increasing its size. Now, remember that bitcoins height of popularity so far was in 2013, which has since then dropped significantly; if we were to see a worldwide adoption of blockchain, storage and synchronization speeds will become very big problems. Right now, bitcoin transactions per day top off at a quarter million, just imagine worldwide usage, where there are hundreds of millions if not billions of transactions per day, it is several orders of magnitude larger than today's usage, and may not be able to handle that sort of traffic.


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