Are Bitcoin and Blockchain Technology The Future
Are Bitcoin and Blockchain Technology The Future
It has been nine years since Satoshi Nakamoto created Bitcoin and more importantly the underlying technology of blockchain. Now the question that we have to ask ourselves is whether the blockchain and Bitcoin are the future. For most people, Bitcoin and blockchain are synonymous, which is not surprising seeing as Bitcoin is powered by the blockchain. The difference is that the blockchain is a database while Bitcoin is a virtual currency. We at Bit Gale would like to tell why we think both of them are here to stay.
They are not going anywhere
Blockchain technology and the Bitcoin were invented at almost the same time. Since then, most of them have advanced quite a lot. Most finance and technological experts agree that both of them will be here well into the future. At some future point, central banks may even come to accept Bitcoins.
However, experts are also discovering many new uses for the blockchain. In future, it could be one of the most widely used technologies. However, there are those that feel this may be just some wishful thinking. Let us examine the possibilities offered by the two and their limitations.
Possibilities of the Blockchain
Most experts envision many practical use cases for the blockchain, this includes:
The blockchain could be used to create an immutable record of the transaction and store it in a transparent and decentralized database. It could be useful in verifying the authenticity of products by tracking them from their point of origin to their destination.
Claims of vote rigging, even in the US, are quite common. Technologists believe that the blockchain could be used for voter registration. It could then be used to identify voters and ensure safe electronic voting. This will ensure only legitimate voters can vote and that only legitimate votes count.
The public benefits sector is fraught with bureaucracy, which slows everything down. With the help of the blockchain, it can help to speed up the process and ensure that welfare benefits are redistributed fast and to the right people.
The health sector does not have a secure platform on which it can store and share sensitive medical records. The blockchain can offer this sector a secure platform that ensures records are sent securely and that only those authorized to view them can have access to them.
In future, the blockchain could replace some of the jobs performed by lawyers. This is especially so in the area of licensing intellectual property. Other areas where smart contracts can be applied include the car rental sector.
Bitcoin could one day become an alternative to the fiat currencies. It is especially so if central government embrace its use as a means of conducting transactions. There are numerous reasons why Bitcoin has become so popular.
For instance, it is anonymous, secure, and decentralized. Unlike other currency, there is no one with central authority on it. The flow of Bitcoin is entirely dependent on market demand. Another reason is that it is impossible to counterfeit. This is thanks to the cryptography used to create Bitcoins.
This cryptographic system is used in every transaction to ensure total anonymity. They are also a rewarding albeit risky investment. In fact, if you ask any financial advisor, they will tell you not to try them. Bitcoins and other virtual currencies have also proven quite resilient despite harsh government control around the world. The only way that virtual currencies can go is up.
There are quite many challenges that threaten the future of virtual currencies and the blockchain that powers them. Here are some of them:
Control by Cartels
There is always the risk that a private blockchain will emerge, which is controlled by a consortium of cartels. Besides that, there is a small chance that banks could end up owning all the cryptographic keys, which would negate the transparency that comes with the blockchain.
The 51% Attack
The Bitcoin network could become compromised if over half of the nodes decide to lie. This would essentially let them do whatever they want. This is what Satoshi Nakamoto called the 51% attack when he released Bitcoin. With the growing power and efficiency of computer technology, there is a small chance that this could one day be possible.
The Lack Scalability
The blockchain could become unsustainable in future due to lack of enough storage space or the high cost of storage space. The chain grows after every transaction. This growth is exponential as long as people continue to transact with Bitcoin.
While this article may not exhaust everything regarding the future of blockchain and the Bitcoin, it has demonstrated that there is great potential. If more research is put into the blockchain technology, it could change the future of the world as we know it. However, it has also shown there are real risks, and more needs to be done to mitigate these risks.