Bitcoin is a digital currency and is currently the best known cryptocurrency.
The blockchain is there, and it seems that it will stay. Cryptocurrencies are the first thing that many people associate with blockchain, but it is used for more than finances.
Abram Walton, American delegate for the International Organization for the Standardization of the Blockchain Committee and Management Professor at Florida Tech, described the blockchain as having mainly two different uses – one being financial and the other being part of the business.
“Everything we call a room, even the digital dollar – they are all in this bucket of money,” said Walton. “The other big blockchain bucket is what we could call the company or the utility blockchain.”
Blockchain is a technology that uses a network of different computers working together to create a large transaction book. These transactions are public and because they are verified independently by each individual computer, are almost impossible to use fraudulently.
What is the financial use of blockchain?
Cryptocurrencies are one of the most famous financial uses in blockchain. They work by creating a digital experience of each transaction that occurs on a public network.
The value of the cryptocurrency is determined by supply and demand. For tokens like Bitcoin, there are a limited number of tokens that can be purchased, and as the popularity of the token rises and more people try to buy from the limited offer, the value of the token increases.
Bitcoin is currently the most popular and most used cryptocurrency. Assessed at nearly $ 100,000 per token, the Bitcoin price has increased tenfold in the past five years.
“It’s a rare resource,” said Walton. “We don’t really do much as fast as we did, and there is a higher demand for its acquisition.”
Some predictive models have the price by Bitcoin, reaching more than $ 1 million depending on the stock -up model that is used to predict the value of other rare resources such as silver and gold. It is important to note that these statistical models use historical data to try to predict the future value of Bitcoin but do not serve as a guarantee of the assets reaching a certain price.
Because the price of bitcoin is entirely based on supply and demand, Walton said that if the market remained on the same trajectory that it is currently, a price of $ 1 million per bitcoin is conceivable, but it n ‘is in no case guaranteed.
“To reach a million, it must be a sustained asset class that people want to hold,” said Walton. He said there were disruptors who could make bitcoin an asset less desirable to hold, which would lead to the drop in value due to a drop in demand.
Walton said its main concerns about Bitcoin longevity are quantum technology and AI.
Quantum technology could disrupt the encryption on which Bitcoin blockchain is based for safety, and AI trading could cause more serious fluctuations in the value of Bitcoin, according to Walton.
What is the usefulness of the usefulness of blockchain?
Blockchain uses in the company serve a very different goal from that of blockchain’s financial uses, although there are some horses.
One of the current blockchain uses in a business context is to follow the supply chains. Using the blockchain, all the stops that a product made along the supply chain can be followed and recorded on a large public book.
Walton said that this was useful in cases such as product reminders because there is a clear recording of what products found themselves in retailers, then reminders can be properly processed.
This technology can also be useful with regard to shipping plans. When each entity that interacts with a package records it on the blockchain, it is much easier to follow where something has gone wrong if the package does not happen.
Intelligent contracts combine certain aspects of the company and the financial use of blockchain. An intelligent contract is a contract created on the blockchain that automatically pays after proving that goods or services have been provided.
“It is a really useful tool for non-payment and things like that,” said Walton. Since the contract is linked to the cryptocurrency account of each party, automatic payment deletes any payment negotiations once a contract has been carried out.
The main problem with intelligent contracts is the fluctuation in the value of the cryptocurrency. If a contract is signed requiring the payment of a bitcoin, this value can change considerably at the time of the end of the contract.
The way to avoid this is to require Bitcoin payment equal to a defined amount of another currency, such as the US dollar.
What are the regulations and obstacles to which the bonds of the blockchain?
On January 20, President Donald Trump signed an executive decree that created federal support for the use of cryptocurrencies and blockchain technology. This order protects the use of these technologies by individuals and those in the private sector and also indicates that the government will work to create clear regulations for digital assets and blockchain, although this is not easy.
“It’s a nightmare of the regulation,” said Walton. He said that due to the speed with which these technologies are evolving, it will be very difficult for federal regulators to follow.
One of the biggest challenges that Blockchain technology faces is the amount of data necessary to maintain all the transactions that take place. The blockchain system would not even be able to follow the daily transactions of credit card at the moment.
“There are too many transactions,” said Walton. “We have technological problems to solve – it will be a big problem.”
Over time, in particular with the federal government increasing its involvement in this technology, it is likely that it will continue to grow.
“I don’t think it’s something we can put in the sand,” said Walton. “Let’s suspect it, but very intelligently.”
