$100 purchased on January 1, 2011 would have bought you 333.33 Bitcoin. At current rates that would be worth $2,189,819.77 USD.
So it's no wonder why everyone is so excited about Cryptocurrency. Who wouldn't want to see that kind of a return on an investment? But it's so much more than that in my opinion... The Blockchain technology that Bitcoin is based on has the power to be revolutionary to so many. It has the ability to deeply change our lives. So what is it?
Keep in mind I'm in no way an expert. I don't pretend to be any type of authority. This article on Blockchain is a little technical, but still a good read. Here's my distilled version:
Blockchain was introduced in 2008 with the conception of Bitcoin. It was introduced by someone (or a group of people) named Satoshi Nakamoto (which is a fascinating story in and of itself). Blockchain was designed to be open/public, verifiable, and permanent while eliminating the need for a someone/thing to be in the middle to manage it all. It's commonly referred to as "a ledger secured with cryptography". So all the records live in a database, and are able to be added to or changed, but not erased. And because it's decentralized it is distributed over a network of devices. No one entity owns that network.
Think about what's involved in sending money to someone through your bank. I write you a check, you go to the bank and cash the check. But the bank (or banks) are in the middle of the whole transaction. It seems like a simple transaction but there's a lot that happens that you don't see. And sure they've made it better/faster over the years but it's still "a process" that takes time and effort. Your "free checking" account isn't free for the bank. It costs on average $1.22, in manpower and incidental costs, to process a paper check.
Bitcoin on the other hand, is drastically different. If I want to send you money (in Bitcoin) I get your wallet address and I send the amount. My wallet is debited and yours is credited. The transaction is recorded on the blockchain and we all go on our merry way. Yes there are some transaction fees but they are nominal in comparison. (This is where bitcoin mining comes into play.) By removing the bank it creates faster, cheaper, and some would argue safer transactions.
So banking and finance makes a lot of sense but how else can we use blockchain to make our lives better? Here are a few that make sense to me:
- Medical Records - This is a no brainer to me. If I move, if I switch doctors, the records are all there for anyone that I authorize to see.
- Voting/Elections - It would be hard for the Russians to hack the blockchain. I expect this to be big in the next few elections.
- Supply Chain Managment - This is defined as: "the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption." So again this is a no brainer. Assets need to be kept track of and companies are constantly developing tools to manage them. Why not use blockchain?
- Logistics - This is something that companies already do fairly well but anything that creates safer, faster, and cheaper transactions will be disruptive in this space.
- Food Processing/Tracking - If Jiffy puts out a tainted batch of peanut butter they need to get on top of it ASAP. Blockchain can help trace the origin of the raw materials or supplier that was involved and quickly issue a recall. Lives could literally be saved by using blockchain.
- Communications - I don't know what this looks like yet but I think it has the potential to kill the PSTN and I'm really excited about that.
So these are obviously only a few ideas. There are so many possibilities that it's inevitable that we start seeing blockchain used in ways outside of the financial sector. I’m really excited for what the future might bring.
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