Category: Blockchain

Blockchain is admittedly complex, so let’s break down what blockchain is.  According to IHODL, blockchain is a “distributed database existing on multiple computers at the same time” and grows as new blocks or sections are added to it.

It’s considered a chain because each block links to the previous one with a timestamp making them irreversible, hence incredibly secure. If you think of blockchain like a traditional ledger; when price, asset and ownership are recorded, the information is updated across all nodes, or segments of the system, immediately.

Since the database exists on many computers, there is an increased level of security called a cryptography key that gives editing access to select users.  

Those users are the only people about to make an edit to the transactions. Since blockchain is a piece of software not connected to the internet, it does not carry the same risk for hacking.

The first record of this concept was a research paper entitled, New Directions In Cryptography. However, in 2008 an anonymous group introduced Bitcoin the first practical use of blockchain to provide users with instant payments not subjected to manipulation.

How much is bitcoin worth?

In March of 2019, 1 Bitcoin is worth $3,964 US Dollars. The lucky ones chose to invest in bitcoin in 2013 when the price was far more volatile.  Those that took the risk and invested in blockchain technology are reaping the benefits today, a $1000 investment in bitcoin is worth $26,400, that’s an ROI of 2540%.

Compare that to the average savings account yield of 0.06%. Prominent investors Warren Buffet and Mark Cuban are skeptical.  They are supported by Vanguard founder, Jack Bogle, with the reasoning that there is no underlying rate of return.

While bonds have an interest coupon, stocks have earnings and dividends, [and] gold has nothing. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.”

Cryptocurrency & the SEC

Bitcoin’s cryptocurrency competitors Ether was being considered for regulation by the Securities and Exchange Commission (SEC) in May of 2018, which would greatly impact its potential growth.  

Although at Yahoo Finance’s All Markets Summit, the SEC’s director stated that Ether is not a security so it is not subjected to SEC rulings. The differences between Ether and Bitcoin are intricate but both saw immediate growth after Hinman’s statement on behalf of the SEC.

With the SEC concerns behind them, cryptocurrencies have seen steady growth as the risk of lawsuits and seizures are minimized.

While investors disagree in opinions on a bitcoin investment, few can deny the widespread impact bitcoin and other blockchain technologies will have on various industries including finance, healthcare or manufacturing.  

What are 8 uses for blockchain technology?

  • Digital Currencies like Bitcoin
  • Supply chain monitoring
  • Voting
  • Property Transfer
  • Data Storage
  • Medical Recordkeeping
  • Digital Identification Authentication
  • Copyright and Royalty Protection  

To read more about blockchain and its impact on personal and industry investors, check out some of these popular posts:

Bitcoin and Blockchain Technology, Explained

Bitcoin and Blockchain Technology, Explained

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