/ Finance

Cryptocurrencies and Blockchain

What is it?

Blockchain:
Best described as a digital platform for recording and verifying transactions so that other people can’t erase them later. The blockchain is an open ledger that is decentralised and managed across the network, this reduces the risk of being hacked.

Many experts see this block chain as having important uses in technologies, such as online voting and crowdfunding, and major financial institutions such as JP Morgan Chase see potential in cryptocurrencies to lower transaction costs by making payment processing more efficient.

Cryptocurrencies:
Much the same as the old standard (cold, hard, cash) however, these are digital assets used as a medium of exchange. The first decentralised currency was Bitcoin. Many cryptocurrencies have been created since the Bitcoin inception (2009) such as Ripple,Dash and Litecoin.

Cryptocurrencies are not immune to the threat of hacking. In Bitcoin's short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value. Still, many observers look at cryptocurrencies as hope that a currency can exist that preserves value, facilitates exchange, is more transportable than hard metals, and is outside the influence of central banks and governments.

Who is leading the charge?

A few countries are taking a lead on the use of the technology;

  • The Netherlands has created its own cryptocurrency to further understand the impact it may have on its economy in the future. Many of the major banks are funding the project with close to €1 million already invested.

  • China conducting its own testing with the support of the Chinese federal bank. Areas of interest include Tax collection using a blockchain framework.

  • Russia, much the same as China has a federal backing to understand the benefits of the technology. Many of the major Banks are funding the project alongside the Institution of Science.

What does the future hold?

According to Blockchain co-founder and CEO Peter Smith, major changes in the way we live and work with technology could happen in the next 20 years.

"I predict that by 2037 a complete global computer fabric will make interacting with goods, services and people easier than ever. Citizens of the world will be more closely connected through technology, communication and networks."

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