When we first heard the word “Bitcoin” back in 2009, no one could quite get their head around the idea of a decentralised digital currency, “who would ever use a digital coin instead of a real one?”. Back then, a single Bitcoin was worth just a couple of measly dollars.
Almost a decade later, Bitcoin and the whole concept of digital currencies has exploded, with a single Bitcoin going for around $7000 at the time of writing. Over the last six months especially, anyone involved in cryptocurrency has been on a bit of a rollercoaster ride in terms of its volatility, and they have also been exposed to its stiffest competition- Ethereum.
What makes Ether such a threat to Bitcoin is the fact that it functions on its own unique Blockchain technology and therefore has way more functionality rather than just its monetary potential. A feature unique to Ethereum is the concept of Smart Contracts which essentially automate any kind of process in a trusted way. One of the main selling points of cryptocurrency is the fact that you can send or receive money without needing a third-party mediator such as a bank or payment provider. A Smart Contract allows you to do this while being able to program a set of rules in the form of if-then statements and when particular qualifications are met, the next step is released.
All of these contracts are publicly and permanently recorded and cannot be tampered with in any way meaning they are more trustworthy and reliable than any third-party intermediary could ever be.
A good example of this would be selling a car. First of all, you need to find a buyer, exchange money, transfer the title and record the whole process with the relevant authority. If you can link the transaction to a smart contract on the Blockchain, all of this process can be automated and each step executed upon the completion of the previous step. A website such as Autotrader could integrate a Blockchain application that would take care of the entire process including the record of ownership, titles, and registrations.
It is examples like this that can give us an idea of the impact Blockchain will have on the Internet of Things. We are still in the early stages of discovering the potential of this disruptive and innovative new technology, but its cases for use seem almost unlimited.
Another example would be the use of Blockchain technology in the counterfeit wine industry, something which is a particular problem in China. It is estimated that around 70% of all imported wine in China is fake due to counterfeiters buying empty bottles from renowned vineyards and then filling it with cheaper, fake wine. Through the use of Smart Contract technology, microchips could be attached to the wine bottles to create an unforgeable digital identity for each bottle so that they could not be copied, cloned, or corrupted in any way.
Of course, as with any technological advancements, there are also elements of moral hazards. Take, for example, something as innocent as your toothbrush. What if one day, your personal use of your toothbrush could be stored on a pubic Blockchain? Your insurance company could see that you have not been using your toothbrush as often and they could increase your dental premium as a result. The good news is that there is already a global discussion on data ownership with steps such as the GDPR which comes into force in May 2018, that seeks to give ownership of data back into the hands of the individual.
What is important is that members of the public begin to educate themselves on the various innovations that are happening with Blockchain technology and they are prepared for its uses and implications for the future.
The future of Blockchain is happening quicker than anyone anticipated, make sure you are ready for it!
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