Exchange Rate Not The Full Story
It’s obvious to anyone who studies Bitcoin: the biggest innovation is the underlying technology - the blockchain - not the currency itself.
The blockchain solves an age-old challenge called ”The Byzantine Generals’ Problem” using maths and cryptography. Bitcoin’s inventor, “Satoshi Nakamoto”, explains how on this link. Here’s another short explanation on how that’s possible.
The blockchain acts like a public ledger. It can not be changed after it’s been cryptographically signed and confirmed. Anyone can register any asset on the chain, signed by a continually increasing petaflop count of network power.
Biggest = most trusted
As Bitcoin is the biggest blockchain-network it is also the most trusted. It is natural to assume it will be the prevalent blockchain used for last-mile property-tracking (for example; automatically registering your car’s owners, miles and check-ups on the blockchain). This can be done directly or via so-called sidechains that connect to the Bitcoin blockchain.
Solving The Byzantine Generals Problem has implications for many areas of business.
Insurance, public and private records, voting, bonds and shares, escrows, contracts and signatures are only a few of the business interests that’ll be affected by the blockchain (here’s a list of more than 80 industries the Bitcoin network’s blockchain technology seems poised to disrupt).
30.000 Programmers Can’t Be Wrong
Mike Novogratz, currently the CIO at Fortress and formerly a Goldman Sachs partner, estimates that over 30.000 programmers are currently involved in bitcoin-related development.
Here’s Tech Crunch’s take on the disruption the blockchain will cause in the near future. Here’s Telegraphs outlook on a future with the blockchain. And here’s Netscape-founder Marc Andreesen’s explanation on why and how the blockchain will disrupt.
Anyone involved in intellectual property, financial services or asset-tracking should read these links with their full attention.
Blockchains are plentiful these days, since the first one (Bitcoin) has been copied multiple times. However, the real strength in Bitcoin’s blockchain comes with it being the one and only blockchain.
Or to put it another way: looking at the development of altcoins (other blockchains) in the light of the network effect theory, Daniel Krawisch of the Nakamoto Institute, argues that ”no altcoin can succeed.”
If history is any example, the most powerful blockchain will make most others obsolete in the long run. There’ll be room for specialized blockchains too, but we’ll all benefit if they tag on to the already globalized blockchain that is Bitcoin. Especially considering the blockchain-broadcasting satellites Jeff Garzik plans to send into space, but more on that in an upcoming blog post.