Digital Trend Alert
Blockchain and the Blockchain Economy: an Introduction
by Carol Ingley
President, Media Mogul Enterprises
Week of December 2 through Week of January 6, 2020
Digital Trends: blockchain, blockchain economy, internet, cryptocurrency, bitcoin
It doesn’t take too long after reading about blockchain to find out that it could have a huge impact on the economy – so much so that there is now the term the blockchain economy. But what is all the buzz about?
Blockchain and blockchain economy defined. “Blockchain will do for transactions what the internet did for information,” says Ginni Rometty, CEO of IBM. It’s a technology, then, that specializes in transactions.
In a nutshell, blockchain is an online ledger that could potentially record much of the data in our economy. It refers to a decentralized database. Blockchains have two basic parts: blocks and chains. The block is where digital information is stored. The block is in turn stored on a chain, a public database. The real big advantage of blockchain is the security of the technology.
The subject of blockchain generates a lot of excitement, particularly because of its first big application: cryptocurrency and, in particular, the cryptocurrency bitcoin. But it’s not moving as quickly as some would have you believe. “Blockchain technology will likely take 30 years to evolve,” according to the Harvard Business Review article, The Truth about Blockchain.
The blockchain economy is potentially huge. Gartner Consulting says the business value-add of blockchain will grow to slightly more than $176 billion by 2025, and then it will exceed $3.1 trillion by 2030. These predictions are staggering and it will likely take many more years beyond 2030 to reach such heights. But the numbers make a bold statement: this technology stands to be a major disruption.
The blockchain economy, in one view, is a replacement of the current monetary systems with cryptocurrency such as bitcoin. Should that happen, there will be a ripple effect throughout the entire traditional economy. On the other hand, cryptocurrency may not take off in a big way for some time. Yet, because blockchain is a transactional technology, it can still be used in diverse ways. Marc Kenigsberg states, “Blockchain is the tech. Bitcoin is merely the first mainstream application of its potential.” Key industries that likely will be impacted by blockchain include: banking, healthcare, politics, government and real estate.
Internet and blockchain. How will the internet technology play with blockchain technology? Will they get along? Together, then separately, is the current thinking. Right now, blockchain rides on the back of the internet. After that, what might evolve? Naval Ravikant makes a bold prediction, “Blockchain based market networks will replace existing networks. Slowly, then suddenly. Slowly, then in many things.” Ravikant is the founder of AngelList, a platform designed to democratize the investment process. It helps startups with fundraising and talent.
Power to the powerless. “Distributed systems have the ability to give power to the powerless. They also let the powerful flourish when they take advantage of the creative thinking brought on by collaboration,” points out Stephen P. Williams in his book Blockchain the next everything. In many cases, the middleman gets taken out of the equation. “Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly,” says Vitalik Buterin, co-founder of Ethereum as well as co-founder of Bitcoin Magazine.
Vitalik Buterin also says, “The main advantage of blockchain technology is supposed to be that it's more secure, but new technologies are generally hard for people to trust, and this paradox can't really be avoided.” Blockchain is at the very beginning of its development. Its potential is huge but, as Buterin says, new technologies are hard for people to trust. It will take time for this to evolve.
Digital Trend Alert