In 2021 we have already seen the boom of many cryptocurrencies with Bitcoin expected to hit $400,000 and ADA already hitting a $1. With the likes of Elon Musk somewhat driving more interest through public interactions and Damien Hirst now excepting payment in these forms of currency alongside his worth with Ethereum, is the blockchain technology as revolutionary as it seems?
What is a blockchain?
Simply put, a blockchain is a form of a ledger held by the public in a digital form of documentation that shows every transaction. Blockchains are the foundation in which digital currency is run on.
Blockchains don’t only just look after currency. It is also important to understand NFT (non-fungible token) when it comes to blockchain. NFT is where each token has a unique presentation that is not interchangeable. NFT are used for digital media files in the art industry, giving authenticity and ownership of each file with even more transparency. This means that forgeries for art work and copywrite issues are drastically reduced.
Benefits of blockchain technology
Useful for countries with unstable economies, blockchain technology offers a level of stability current currency does not where inflation is driven by economically crisis. It also means where currency value is determined by monopolistic settlements such as the government or banks, blockchain gives a clearer picture of ownership, with a shared trace of where the item in question has come from.
The main benefit for blockchain and subsequently cryptocurrency, is that not only does it use cryptography to store the information securely, but since cryptocurrencies are held under decentralised control, there is no one unit, group organisation that dictates the control over the currencies.
Another benefit of blockchain is that due to the extensive way in which information is lodged makes it harder for hackers to intercept, replicate and distribute fraudulent currency.
What does blockchain technology offer the future?
With greater transparency, ownership and security, the move to widely using cryptocurrency, or integrating it within regular societal use, it means that trading could become less dictated by conglomerate organisations with more ownership given to individuals.
However, until cryptocurrencies are regulated as legal tender, could this use of cryptocurrency and technology only be rolled out in cases where there is large capital to back up the transactions? Meaning only reputable business would deal in this stock? Only time will tell.
While the public are starting to become more involved with crypto as online stock accounts are in high demand, it may be a while before you can buy your latte with digital currency.