Lately, there has been a lot of talk about cryptocurrencies and the words Bitcoin, Ethereum, and Litecoin are becoming household names. For the vast majority of the public, a mystery exists regarding what cryptocurrencies are, but nevertheless, here we are in early 2018 where South Korea has recently banned all cryptocurrency trading and pleads with other countries to do the same.
Where did Bitcoin come from? Why is it a thing? Why is it not going away? Why should I care? These, my friend, are the common questions your friends and family may be asking right now. These were the same questions I asked myself not too long ago, and what I found led me down a path to a vision of the not too distant future where the underlying technology that makes cryptocurrencies possible will likely fundamentally change the way we do banking, contract negotiations, maintain vital records, maintain security over our private information in the public space, and so much more.
What is Blockchain?
Blockchain, in the TLDR explanation, is essentially a distributed database that duplicates the information, known as the ledger, on every single computer that is connected to the particular blockchain network, and those computers each verify that any change made to the ledger is executed only if the change is being made by a valid and authorized source. The source of that change is identified by a hashed value, and it is this cryptographic hash that makes anonymity the major selling point for future technological use-cases. Miners utilize their CPU to find unique hashes for each requested change to the ledger, collectively authorize the source’s credentials, and then, via smart contracts, execute the intended action on behalf of the requesting individual. Was that too technical?
In the real world, let’s say you would like to login to a hospital’s website to view your medical records. The current approach is to use a username and password, which is only as secure as you make your username and password, and the preventative steps you take to ensure no one is keylogging your network, remotely viewing your screen, or accessed a vulnerability from within the hospital’s network. Well, in the not too distant future, it may be possible to use a blockchain algorithm to establish an extremely high degree of trust between you, your computer, and that hospital’s website without ever transmitting your personally identifiable information (PII) over a secure or insecure network.
So, Really Quick…What are Bitcoin, Ethereum, and Litecoin?
So, cryptocurrencies like Bitcoin, Ethereum, Litecoin, and others, are special protocols for verifying the data on a blockchain, making edits to that blockchain, and rewarding miners for sharing their CPUs for the collective computing power. If you sit back and think about it, banks have been established as a middleman to ensure that all parties engaging in commerce are held accountable and are trusted. Your bank accounts are essentially an escrow account where it can sit, be insured, and in the event, you wish to pull your money out to make a purchase, you may. This financial integrity brought by the banking industry is the reason why those dollars in your wallet (okay, you don’t carry dollars anymore), or digital representations of those dollars sitting on your smartphone, have any value at all in the marketplace. Banks establish trust between consumers and companies. Blockchain technologies like Bitcoin, Ethereum, and Litecoin provide that trust through the blockchain security hashing algorithm and, in Ethereum’s case, Smart Contracts.
What Does This Mean For Mobile Development?
Good question! I am glad you asked. In the big scheme of things, no one really knows 100 percent what lies ahead for the entire world with regard to Blockchain-based technologies. There are companies utilizing it as a means to provide anonymity among its clients and customers by creating Dapps, or Distributed Apps, also known as Tokens, or Altcoins, to be used exclusively in their own market. Kodak is looking into using their own Dapp to assign usage rights to those who purchase images to be used for commercial purposes with the goal of curbing the wrongful use of creative works. The mobile phone is quickly becoming a place for financial trade in countries where banks either do not exist or are an impractical resource for a multitude of reasons, from corruption to infrastructural problems making banks inaccessible. In fact, there is a revolutionary coin, one that I currently invest in (disclosure), called GreenMed, that provides anonymity for their customers in purchasing medical cannabis legally within the state in which they reside, despite the very real and enforceable Federal laws which prohibit the same of such materials contrary to passed legislation at the state and local levels. Imagine casting your ballot for the next general election using a Blockchain-based technology! Imagine a world where manual tracking of valuable goods is accomplished with the use of automated systems based on Blockchain technology! In much the same way as SQL revolutionized the accessibility of large amounts of data to be shared to a nearly unlimited number of clients worldwide, so too will Blockchain, or a currently unrealized iteration of it, will bring a super secure decentralized distributed database to our daily lives making us a truly more connected and trusting society.
Thank you for taking the time to read this article. What future use-cases do you see for Blockchain-technology? Leave your comment below.