Noah Wilbur | Opinions Editor
In 2010, before cryptocurrency rose to fame as a profitable alternative to traditional investing, a Florida man by the name of Laszlo Hanyecz paid 10,000 bitcoins for two Papa John pizzas. Although at the time this payment seemed equitable for both parties, we are all well-aware of just how unfair this exchange turned out to be down the road.
As of Wednesday evening, at a price of $49,359 per coin, 10,000 bitcoins would now be worth nearly $500 million — let that sink in for a moment. The price has risen more than 65% in 2021 alone as it continues to accelerate after surpassing a $1 trillion market cap earlier this year. With Elon Musk, Jack Dorsey and other business leaders beginning to take an interest in cryptocurrency, the future of Bitcoin and other tokens is undeniably bright.
The recent surge in the prices of Bitcoin, Ethereum, and Litecoin has once again brought into the public spotlight the notion of blockchain technology and whether it will serve a role in our globalized society someday in the near future.
According to Luke Conway from Investopedia, blockchain is a distributed, decentralized and immutable ledger that attaches “blocks” of information into a “chain” — a public database. Although this might be the book definition, I am of the opinion that it does little to shed light on the true value blockchain offers humanity by improving the inefficiencies that plague our world.
To gain a clearer picture, we must ask: What distinguishes blockchain from other forms of emerging technology? Unlike traditional databases, blockchain promotes security and builds trust among users through a shared system where information is “tamper-free.”
This transparency is achieved and further fostered by recording information across a network in a way that restricts any modification of the data while providing real-time access to all network participants.
Put simply, blockchain enhances privacy and reduces risk because information can only be added or viewed, rather than modified or removed. For example, a traditional database allows users to read, write, edit and delete data. On the other hand, in a blockchain, users can only read and write while existing information is restricted from modification and removal.
Without overcomplicating things, what’s most important to understand is that as a decentralized and permanent public ledger, blockchain enables data to be stored in a secure manner across a network where authorized individuals from all over the world can access the information at any time.
From finance and healthcare, to international elections and cybersecurity, this technology can be applied to almost every aspect of our society with the potential to disrupt day-to-day life in the best way possible. To illustrate its future relevancy, here is an example of blockchain’s impact on the banking and finance industry.
As blockchain is incorporated into the industry, individual consumers and major corporations will benefit from faster transactions and considerable reductions in transactional costs.
Arising from blockchain’s transparent nature, the need for financial intermediaries and third-party verification in the transaction process is eliminated whether it be between major corporations or everyday people like you and me. In turn, by decreasing the number of intermediaries, the transaction process is simplified with the other fees and costs associated with a third-party — such as a commercial bank — also removed.
As a result, peer-to-peer financial transactions between consumers as well as payments between both large and small firms are facilitated quicker and processed in significantly less time. Not only are payments executed at a faster pace, but these dealings are also facilitated at a lower cost. In fact, French consulting agency Capgemini recently discovered that consumers could save around $16 billion annually in banking and insurance related fees.
With the number of applications growing every passing day, this real-life case is an excellent indicator of blockchain’s future relevance in an increasingly modern world. Everyday consumers, businesses and even governments will reap the benefits of shortened transaction times and decreased execution costs.
Ultimately, as the preceding evidence certainly suggests, blockchain has emerged as a leading technology wielding the power to actualize necessary and valuable change. By streamlining processes, minimizing unnecessary costs and creating a secure environment for data, I foresee this technology continuing to disrupt long-lasting traditions and elevating humanity to a higher standard of living.