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Blockchains are the Foundation for Cyber Currencies

Blockchains are the Foundation for Cyber Currencies

Most have heard of Bitcoin but don’t really understand it. Most have not heard of blockchains and yet, they are the underlying foundation of Bitcoin and other cyber coins.

Cyber coins are virtual money tokens and intuitively seem unreliable because they are not backed up by anything similar to the gold standard. The gold standard was the idea that for every US dollar printed, there was an equivalent amount of gold stored in a US Treasury vault underwriting the value of the paper money. The US ended this practice in 1971, but the dollar has remained a currency standard because the leading reputation of the US economy lends faith and trust to the dollar.

A blockchain is a journal of transaction history. Historically, accounting journals were kept on paper and their credibility depended upon the authority and reputation of the organization maintaining the journal. A blockchain has no central authority and is distributed publicly. Integrity in the journal is preserved by a cryptographic process known as a ‘hash’. A hash is a one-way encryption of variable input that produces a fixed length string. It is considered to be one-way because it cannot be reversed, at least not without using an unreasonably large amount of computing power and time. Each block in the blockchain includes a hash of the previous block. This makes it easy to verify that no block has been tampered with by recomputing any hash. If any bits in the block have been changed, the hash will be different.

There was a time when we wrote letters on paper, addressed an envelope, took it to a post office, paid for a stamp, then deposited it to be delivered. Today we write an email and send it immediately, to be delivered within minutes, far more efficiently and cheaper in time, effort and cost than sending the letter via the postal service. When we need to move money or document and verify a transaction, we often use a bank, and/or notary service, and/or currency exchange service. Cyber currencies and blockchain technology enables the same processes but at a much lower level of time, effort and cost.

Regardless of where the value of bitcoin or other cyber coins are ten years from now, blockchain technology will be used widely.

Blockchain and distributed ledger technology – going big business – [i-scoop.eu]

Blockchain is poised to be one of the fastest growing digital technologies and digital evolutions for 2018 and beyond; it has a key role in the digital transformation of several processes and industries. Blockchain technology hype is still pretty high and there is a big difference between what a technology could possible do and what it really can do, or even better, does. However, there is no doubt about it: blockchain technology is becoming big business and big in business.

There are several reasons why blockchain adoption is poised to be grow across industries of all kinds faster than expected and with 2018 and 2019 as pivotal years. And even if it is still relatively early days for blockchain for most companies, all signs are clear (as are the roadmaps of some of our partners, de facto implementations and industry initiatives): blockchain is among the top digital trends for 2018 and beyond, albeit with adoption, testing and effective usage at different speeds, depending on context, industry, use case and maturity of the organizations as tends to be the case with all technologies.

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