What’s so Important About Blockchain?

Opinion

Blockchain technology is causing a stir around the world because it has the potential to fundamentally change the way we perceive and interact with our money. You may think that this is a bold claim, but when you consider that most of economics is centered around trust and minimizing uncertainty, and that blockchain technology grants the individual autonomy over their funds, then the potential of blockchain is unarguably awesome.

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When dealing in fiat currency, we are reliant on intermediaries, such as banks, to ensure our security and minimize this uncertainty. The bank’s permission is needed if we wish to move our funds from one place to another, and we accept this because we trust them to make sure transactions are carried out securely.

Most of the time our funds are kept safe. But for this system to work, we must relinquish a great deal of control over our funds and our identities so that the intermediary has all the necessary information to identify both parties and decide whether to accept or reject the transaction.

The process is time-consuming, it incurs fees, and, crucially, it makes it impossible for the individual to govern their own funds. Blockchain technology makes it possible to safely assume autonomy over our own funds, and that is what makes the idea of a peer-to-peer system so exciting to many people.

Blockchains use the highest standard of encryption and provide a record of all previous transactions. Using this information, we can be sure that we receive tokens only from those who own them with the bonus of being allowed to remain anonymous.

But this isn’t the only way that blockchains streamline our ability to send and receive funds. Cryptocurrencies can be sent around the world, and it’s almost instantaneous. If you needed to send funds quickly and securely across borders, blockchain technology enables you to do so without the need to worry about exchange rates or funds being blocked by middlemen.

This technology is still in its infancy, but the possibilities of how blockchain can change what money means are seemingly endless. However, the implications of this technology don’t only extend to finances. Artists have released their music on the blockchain, and people are speculating that, as the technology improves, it could even be used in other scenarios, for example, political elections. Imagine a blockchain that allowed you to see an unalterable and truthful record of all votes in your country.

Some have even theorized that, in a world increasingly reliant on digital technology, the way we interact with our money will radically change, even to the point when we don’t need to handle every transaction personally.

The Internet of Things (IoT) is a way of describing how objects and appliances that are connected to the internet record data and talk to one another. There are more devices connected to the internet than there are people alive on the planet, and that number is only going to rise. This means that there’s a world’s worth of data at our fingertips and more is being recorded every day, which could be used to better almost every aspect of our lives.

We already have the technology that would allow our fridge to place an order for milk. It can even allow our homes to regulate their temperatures autonomously and manage the use of electricity to make us more comfortable or save us money.

Some people are already using this sort of technology. The reason it hasn’t been adopted more widely yet is that people are usually happy with what they know. People are content to let things remain the way they are, and, of course, if you were to share this much information with the appliances in your home, the big question would be: how do you know that information is secure?

If the same level of encryption employed by blockchain technology could be applied to everything in your home, the security question would be answered. Perhaps it’s only a matter of time before most people begin trusting this technology and noting the ways it can streamline their lives. Once that process begins, the way we interact, not just with our money, but with our worlds, will fundamentally change.

Michael is an English and Creative writing graduate of Liverpool John Moore’s University, a former editor of several magazines, and a crypto-currency enthusiast. He is mostly interested in crypto-legislation and the potential of decentralized technology to change the world.

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