Could it solve ad fraud? Will it help us to become GDPR compliant? Is it overhyped? We might not know the answer to many of the questions surrounding blockchain’s evolution just yet, but there are a few surprising facts we do have about the emerging technology and its various uses.
1. Accountability is its backbone
Many know blockchain is an emerging technology, but did you know it’s formed from a combination of encryption (the tech that protects your private conversations in messaging apps like WhatsApp) and peer-to-peer networking (the interaction that enabled the rise of music piracy)?
With no ability for human or machine errors, missed transactions, or exchanges carried out without sign off from all parties involved, accountability is the backbone of blockchain technology.
2. The blockchain creator’s identity is still a mystery
The founder’s pseudonym, Satoshi Nakamoto, is an anonymous person or group first appearing on the scene when it published a whitepaper outlining how the proposed digital currency would work. For the technology’s early years, the pseudonym was active online in the Bitcoin community and made its last ever post on 12 December 2010.
It is likely we may never know the identity of blockchain’s inventor(s), and for many in the tech community, this is how it should be.
3. A hard fork is a method for updating software
The network was never designed for the level of traffic it receives today, so naturally it is experiencing latency issues and delays to transaction confirmations. The obvious answer may look like a software update, however in this case it would mean persuading all bitcoin miners to integrate the new programme. If any miners continued to use the previous version of the software, they would essentially be working with a completely different currency from those who had updated. This is what is more commonly known as a hard fork and recent divisions in the community have lead to this occurring on multiple occasions (hence Bitcoin Classic, Bitcoin Unlimited, and Bitcoin Gold) with each fork meaning the network has become more and more crowded.
4. There are rules about capitalising the word ‘bitcoin’
When capitalised, ‘Bitcoin’ refers to the Bitcoin ledger. While in lowercase form, ‘bitcoin’ refers to the currency or a unit of account on the Bitcoin ledger.
5. Only 21 million bitcoins can be produced
The Bitcoin ledger has rules to which all users must agree, and one of these rules states that there can only be 21 million bitcoins ever produced. When this is reached, bitcoin will be resistant to inflation meaning the value of the currency will not be reduced.
6. The process uses a lot of electricity
Shockingly, Bitcoin’s mining network uses more electricity in a year than the whole of Ireland. In fact, each bitcoin transaction uses almost 300KWh of electricity, which is enough to boil around 36,000 kettles. With Bitcoin’s total energy consumption likely to reach the same amount of electricity as the whole of the U.S. by the summer of 2019, the rise of the technology is cause for considerable environmental concern.
7. You can buy a house using cryptocurrency
Bitcoin has been used to purchase homes in both Europe and America, while in a UK first, a developer sold two homes in December 2017 in exchange for bitcoins. The firm that sold the properties, Go Homes, is now considering utilising other cryptocurrencies – such as Litecoin and Ripple – for future sales.
8. Some companies are using blockchain to raise money
Bitcoin’s acceleration has resulted in many new initiatives. Introducing Initial Coin Offerings (ICOs), which are quickly rising in popularity. Closing at over $3 billion in funding in 2017 alone, ICOs are a way for token offering applications to raise money. Instead of the more traditional venture capital option, a token offering would most likely provide a way of early access to the decentralised application.
These ICOs are one to watch, as they provide a new platform for companies to both raise money and attract stakeholders.
9. Blockchain technology could redefine cybersecurity
There are opportunities for blockchain technology to improve cybersecurity. From holding off hackers to making data tamper-proof and even keeping messaging private, find out how blockchain technology could redefine cybersecurity here.
10. The possibilities are endless
Or at least Kodak seems to think so, as it recently announced plans to mine its own crypto-currency, KODAKCoin. Shares in Eastman Kodak soared to almost 120% when it announced the new initiative, which is intended to create a global ledger of picture rights ownership – something which photographers can add their work to. Kodak is simply the latest in enterprises aiming to leverage the benefits of this game-changing technology within varying verticals and industries.
By Sarah Redman, Account Manager