More than a Trend

By Chase Larson

The roots of blockchain and crypto can be traced to the cryptographers of the early 1980s.

networks, such as Bitcoin and Ethereum. While these crypto networks are linked to public blockchains, there are enterprise – private – blockchains as well.

Cryptocurrency

protect transactions, making them virtually impossible to alter or manipulate.

Aside from the Internet, which emerged at the end of the 20th century, blockchain is the most disruptive technology of the 21st century – and it’s gaining adoption at a rate of two times that of the Internet. It radically unravels the transparency, trust, and accountability issues within business or third-party transactions, and it opens unlimited opportunities for innovation across industries and borders. There are approximately 52 million active crypto wallets at the time of writing this column, and many analysts predict this number will climb to over 1 billion by 2025.

Blockchain Blockchain is a decentralized digital ledger that records transactions in a transparent and secure way. Each block in the chain contains a record of several transactions and a unique code, called a “hash,” that links it to the previous block in the chain. This makes it virtually impossible to alter or manipulate the information stored in, or on, the blockchain. This technology is what underpins cryptocurrency

Cryptocurrency (aka digital assets) is a type of digital or virtual currency that uses encryption techniques to secure and verify transactions and to control the creation of new units. It is decentralized. In blockchain, decentralization refers to the transfer of control and decisionmaking from a central authority (individual, organization, or group thereof) to a distributed network. The roots of blockchain and crypto can be traced to the cryptographers of the early 1980s. However, the modern day blockchain industry began with the release of Bitcoin in 2009, by the pseudonymous creator Satoshi Nakamoto, and Ethereum in 2015.

Key Features & Benefits

1 Decentralization: Blockchains typically operate independently of central authorities, which reduces fraud potential.

2 Security: Blockchain technology uses encryption to

3 Transparency: Blockchain provides end-to-end visibility of the network transactions, with a single source of truth, that is replicated across the network and stored by all node operators or network validators.

4 Trust: Blockchain injects trust into business transactions because the entity facilitating trust in a transaction is replaced with distributed ledger technology.

5 Smart Contracts: A smart contract is a self-executing electronic contract that you would use in legal matters or business transactions. Smart contracts fuel significant process innovation for businesses with automation, speed, and compliance assurances without significant costs or risk.

6 Peer-To-Peer (P2P)

Payments: Bitcoin’s launch in 2009 brought to attention the blockchain’s capability for sending value across the internet in minutes for less than one

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U.S. dollar, without third-parties or intermediaries for processing and settlement.

Central Bank Digital Currency (CBDC)

Given the benefits of cryptocurrency and blockchain, it has led the U.S. government and Federal Reserve Bank (FRB) (among many other countries) to explore launching a CBDC. It is similar to cryptocurrency, except the CBDC’s value is fixed by the central bank and equivalent to the country’s currency. It would allow the FRB to interact directly with individual consumer wallets, increase cross-board transaction efficiency, reduce costs, and increase transparency. While a digital dollar could bring massive benefits, it would reaffirm the importance of local trusted financial institutions to ensure that consumers can continue to store wealth locally and retain their privacy.

The next evolution that’s upon us with this underlying technology is likely Web3, internet of value, and tokenization of assets stored on the Blockchain. This is a possible move away from centralized web platforms and data centers, towards decentralized networks. The consumer will be able to monetize their own data versus ad platforms or social media companies monetizing the user’s data.

Business owners would be wise to learn more about this technology and its impact on every industry. It is not just for those who work in tech or finance anymore, it’s becoming the way of the future.