It has been a decade since the appearance of bitcoin, the alternative or cryptocurrency based on a blockchain, a “decentralized” network or shared ledger that facilitates transparency.
The currency’s pricing gyrations have been nothing short of a roller coaster ride, with bitcoins trading in 2017 as low as $750 and as high as $5,000.
Bitcoin is down from its September 2 high of $5,000 “on speculation,” reports Coindesk, “that the Chinese government is launching a crackdown on [bitcoin] exchanges.” Some others are blaming JP Morgan CEO Jamie Dimon’s scathing attack on bitcoin for the meltdown in the prices seen on September 13.
Business Insider says that as of last September 7 bitcoin is up 355% for 2017 (for the current price, go here). More recently, it has hit a three-week low, and some believe it appears to be hurtling toward correction at around $3,000.
Hyped & Misunderstood
“No term at present is more hyped or misunderstood than blockchain,” reports FORTUNE. “A blockchain is a kind of ledger, a table that businesses use to track credits and debits… [It is] a definitive record of who owns what, when.“tp
“Properly applied, a blockchain can help assure data integrity, maintain auditable records, and even, in its latest iterations, render financial contracts into programmable software… Even if participants don’t trust one another, they can rely on the shared ledger through the transaction dance of their software.”
Goldman Sachs, Bank of America and MasterCard are among the most frequent recipients of blockchain patents. As reported in IP CloseUp, patent publications and grants are on the rise.
But despite price volatility, or perhaps because of it, bitcoin continues to attract converts. Among those who accept transactions with them are Microsoft, PayPal, Fortune magazine, Intuit, Amazon, Home Depot, Target and more than 100 companies.
Bitcoin is not blockchain, but the currency made possible by a blockchain platform or “shared ledger“ that underlies it. This is said to allow for transparency without any one party controlling clearing or profiting unfairly.
Bitcoin = Blockchain 1.0
Bitcoin is one manifestation of the blockchain ecosystem. It is an example of what a blockchain can do, but it is just the beginning. Blockchain 1.0, if you will. Industries as diverse as energy, healthcare and law are already using variations on blockchain technology.
The attraction of bitcoin is many-fold. Most important, it is highly private if not totally anonymous and eliminates the cost of middle-man and confusion from lack of transparency. 16.4 million bitcoins have been minted; after 21 million no new coins will be created. Once all coins have been mined value from the system, it has been said, will be derived from transaction fees (kind of like shares of stock).
For a bitcoin primer go here.
For those of you interested in the history of the bitcoin and early blockchain era, the following infographic – “10 Years of the World with Bitcoin – 58 Insane Facts” – from BitcoinPlay will enlighten as well as amuse. Source urls can be found at the bottom of the image.
Image source: bitcoinplay.net; bitcoin.com