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Bitcoin and the Blockchain – Why They Matter
A significant technological advance will benefit businesses in the near future
The internet is a technology that has rapidly become indispensable. It has facilitated new businesses, enabled sharing of information, streamlined all sorts of transactions and communications – if you have a relative in Australia you can see their new baby on Skype, for example, which would have been difficult to arrange in the past. Vast companies have arisen – Amazon, Google, Facebook, which were just a gleam in a few geeky students' eyes not long ago.
There is a downside to all this: trolling, cyber attacks, identity theft, and various other new crimes, but most people would agree that these amazing technologies have benefitted the majority. That's not just in the wealthy West: smartphones have enabled Africans, for example, to use bankless mobile money transactions, enabling them to transfer money and even start businesses which they couldn't have done without the internet and its web of connectivity.
The world wide web is the foundation for many technologies, for example skype, cloud computing and peer-to-peer networks.
Another really major advance is on the horizon. The blockchain.
Most of you have probably heard of the blockchain in relation to Bitcoin, which is a “cryptocurrency” - that is non-centralised money which is both an investment and a medium of transaction, but instead of being held in banks the accounting is distributed all over the internet.
It is called the blockchain, because each transaction builds on the last, in an unbreakable chain. There isn't the space to discuss this in depth here, but it is the blockchain as a concept that is important, not bitcoin, which may or may not succeed, although it does have first-mover advantage, but recently it has had scaling difficulties. By using encryption and peer-to-peer distributed “accounting”, transactions avoid banks, are low-cost, and highly-resistant to fraud.
But the blockchain can be so much more. For example, many artists, musicians, creative people struggle to make a living, because their work can be pirated and it is almost impossible to receive income from it. We can envisage, in the future, where if you wanted to reproduce a blockchain copyrighted artwork on your website, some bitcoins would automatically be deducted from your bitcoin account and sent to the artist's wallet, via programming built into the blockchain without any human intervention. Many people have suggested micropayments like this, but the centralised banking structures are too high cost to make deducting say, 5p from your bank account feasible, but it is with a blockchain-based system. Those 5ps would add up. It would be the same for any digitally-enabled business.
Potentially myriads of different usages can be encrypted into the blockchain. Another new cryptocurrency, Etherium, envisages itself as a medium for this, rather than strictly as a currency.
With Wandsworth being one of the major London hubs for new businesses, many of which are highly digital and networked, there is a need to raise the awareness of how altcoins (as the various cryptocurrencies are called) could be a beneficial method of building up a business, raising funding, or expanding the reach of products and services via the network.
As famed science fiction writer William Gibson said, “The future is already here – it's just not evenly distributed.” The Economist, 2003.
Author: This article was written by Julian Jackson, Wandsworth Chamber of Commerce's resident blogger and copywriter - https://julianj.journoportfolio.com