With the recent explosion of the Bitcoin market, cryptocurrencies and blockchain technology have become newsworthy topics. The Harvard Business Review explains that the blockchain is a ledger that documents transactions between parties through an open network that is both verifiable and permanent. Such technology has given rise to Bitcoin and other cryptocurrencies, and it has the potential to shape the future of the global economic system.
Current Blockchain Technology
CB Insights describes that blockchain tech gives multiple individuals the ability to share a verifiable and common history of assets and transactions. Blockchains share information regarding all transactions that occur within the blockchain, and transactions are regularly updated throughout the entire network. This means that every record is public, verifiable and virtually incorruptible because transactions are stored instantaneously on millions of computers across the globe. It’s estimated that around 700 different variations of cryptocurrencies are available today, and these types of currencies wouldn’t be possible without the blockchain system.
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The Future of Blockchain
This incredibly unique type of system is still in its infancy, so it’s challenging to imagine how it will impact the future. Peer-to-peer transactions have risen exponentially since the rise of the internet. The immense success of websites like GoFundMe and Kickstarter suggests that consumers are interested and willing to contribute to business ventures and product development. With the addition of blockchain-like technology, crowdsourcing has the potential to be verifiable, incorruptible and public. There is no need for a middleman, and transactions can be made in minutes across the globe without exchanging currencies. The blockchain additionally reduces the risk that comes along with a centralized data storage unit.
These advantages of blockchain could be used for secure and transparent voting systems, supply chain documentation, file storage, the sale of renewable energy microgrids, identity management and protection of data.
This type of technology is promising, but there are a few major issues preventing blockchains from reaching their full potential. Due to being decentralized, the blockchain must constantly receive updates, and nodes are always being distributed throughout the global network. Blockchains suffer from high latency which means that it takes data a longer time to move throughout the network than in a cloud-based or centralized system. Currently, Bitcoin can only handle a maximum of around four transactions each second.
The speed of this technology is not the biggest roadblock for blockchain. In order for such a system to be utilized on a wider scale, technological, organizational, governance and societal barriers will all need to fall before people are willing to accept such a new type of system. The blockchain is a type of foundational technology that has the potential to create new economic and societal systems rather than simply improve or disrupt the current order. This fact makes it apparent that the acceptance and integration of blockchain tech will likely be gradual despite its incredible potential.
After the economic depression of 2008, an idea for a revolutionary, decentralized cybercurrency system was posted on an obscure chat board. This amazing idea has blossomed into today’s Bitcoin and cybercurrency market. Overall, there is incredible potential for blockchain technology to revolutionize the various economic, political and societal systems we operate in, but there are still some obstacles that need to be overcome before such technology becomes widespread.