And a beginners guide to understanding blockchain technology.
Yes I am invested in cryptocurrency. Actually let me rephrase that, I am invested in Blockchain technology — what’s that you ask? Here in lies the teething issue surrounding cryptocurrency in this period being it’s infancy.
Now this paragraph is going to be a headful, but it is important! I implore you to read it, and if necessary again and again.
To give you some context here’s the basic premise of blockchain tech. Block’s are a distributed ledger and are not centralised (easiest example being all your funds in a bank), they contain pieces or portions of data, for the world’s most famous — Bitcoin, this would include transaction details (sender, receiver and amount). Stay with me here. Aswell as data they have a hash, or a unique fingerprint. This is used to identify the block and also detect changes to it, if the hash changes, so too does the block (disrupting the chain=hack for example, which then makes proceeding blocks invalid, therefore the hacked block would be rejected off the chain). The hash of the previous hash block is also encased in the block, this is designed to create a coinciding chain. Here’s where I play devil’s advocate, why not just tamper with every coinciding block essentially creating new fingerprints as you go? Computer’s nowadays are fast af?
You can’t, a proof of work mechanism is built into each block, it slows down the creation of new blocks (10 mins for each block in the case of Bitcoin), so if you tamper with a single block, you would need to calculate the proof of work for every single block proceeding.. impossible.
Additionally, and here’s where that buzzword of decentralisation comes in, a lot of people have a copy of the chain (in the peer to peer network), when a new block is added (in the case of the hacking example, someone tries to tamper with a block on the chain, each peer or ‘node’ must accept the block to create consensus, only then will it be accepted. If a block is tampered with it will be rendered invalid and be rejected. #safety
SO in summary, here’s what has to happen for a blockchain to be compromised: all the blocks on the chain must be successfully tampered with, the proof of work for each block must be redone, and control of over 50% of the peer to peer network has to be assumed to create consensus. Good luck.
Now apply this technology, security and uniquely methodical ability to identify data to warehousing, logistics, healthcare, financial services, government, retail, hospitality, media and even transport sectors.
Now that you have somewhat of an understanding of the concept of blockchain technology you see it is much more than a method of creating currencies, and dethroning the banks, because that’s what the media told us isn’t it?
I have found that when someone does not understand something fully, or it disrupts the ever so comfortable balance of every day accepted ideals , people have the propensity to swiftly shun it as a scam or say things like “it’s been the same for decades, it’s proven why would would it change now?” Hence the blockchain geek out explanation.
I see it everyday in my profession with pre conceived notions regarding health, and the same parallels can be drawn to the changing technological landscape. People have an innate ability to live within their own accepted truths. A comfort mechanism?
When I started writing this piece, cryptocurrencies were still in a period of correction, thus the space was rife with bashful news stories. As a useful exercise, I wanted you to google cryptocurrency in the news tab, I guarantee you atleast 6 stories on the first page would have be associated with negative connotations. In cryptocurrency the communities call it ‘Fudding’ (fear, uncertainty, doubt). Many people believe this kind of ‘propoganda’, distributed by media outlets and within the communities themselves contribute to ensuring prices stay low. To be honest, I don’t really care much about the above point, I’ll leave that for redditors to squabble over.
What does intrigue me are the underlying reasons why outlets and even well respected personalities who have made more money than most of us will in 100+ lifetimes (looking at you Warren Buffet) reject cryptocurrency, and in extension the blockchain technology.
Is it that humans are distinctly inept at embracing change on a grand scale, or is it that routine breeds routine. Maybe a combination of both.
From a purely individual perspective, I find it absolutely fascinating to chart the ongoing reaction towards blockchain technology within the media, both print and visual. Such is the extreme nature of the caper, it jumped on the hype train that was the December boom. Quoting ‘experts’ who predicted 100k Bitcoin prices (when it was at $20,000). Now this may still be entirely possible, but in this context it demonstrates the distinct lack of understanding and focus of what blockchain technology should be seen as in mainstream society.
Conversely, now that the market has corrected itself and the many hundreds of thousands of naive get rich quick wishers have lost their money and are swiftly in and out of the game (panic sellers), there was blood in the water. I guess where there’s large volumes of that particular person I mentioned in the previous sentence, there are equally as many opportunists, ready to prey on easy money.
Such is the volatile nature of the space, a growth period is imminent, which in all likelihood will be followed by a correction. The uncertain nature of cryptocurrency as it stands may be the reason behind the fierce media scrutiny. What do they say about not rocking the boat?
Who knows what the future of blockchain technology holds, like the .com bubble many of these coins are making enormous gains based on no tangible product or blueprint. The market has been swamped by new coins, how many will last is anybody’s guess, for mine few will survive. One thing I know for sure though, if and when cryptocurrency makes the news for all the wrong reasons again, you can bet your bottom bitcoin that the media will be all over it. Flogging their favourite hobby horse.