It is nine years since Satoshi Nakamoto came up with the concept behind blockchain technology and the question “are bitcoin and blockchain technology the future?” is more relevant than ever. To many, bitcoin and blockchain are almost synonymous. This is not surprising since bitcoin is powered by blockchain technology. The difference is that blockchain is the database while bitcoin is a digital currency.
Here to Stay
Bitcoin and blockchain technology were invented almost at the same time and both of them have made tremendous milestones. Many finance and technology experts agree that bitcoin is here to stay and may even be accepted by central banks in future. On the other hand, experts are discovering new blockchain use cases every day suggesting that it could be one of the most widely applied technology in the future. Does it mean that bitcoin and blockchain technology is the future or is all this simply wishful thinking? To enable you to answer this question, we will look at the possibilities presented by the two and the limiting factors.
Experts predict that blockchain could be widely adopted in many sectors including;
- Supply chain management
Blockchain technology could be used to record transactions securely and transparently in a decentralized database. It could also be used to verify the authenticity of products by tracking them from the point of origin.
Claims of vote rigging are not new in today’s world. Tech experts believe that blockchain could be used in voter registration, identity verification and electronic voting to ensure only legitimate voters vote and only the legitimate votes are counted.
- Distribution of welfare
The public benefits sector is characterized by bureaucracy making everything slow. Blockchain technology can help in seamless assessment, verification and distribution of welfare benefits.
Health institutions do not have a secure platform to store and share data such as medical reports. Blockchain technology can provide such a platform and ensure that confidential data is only accessible to authorized personnel and patients.
- Smart contracts
Blockchain can be used in smart contracting for example in online licensing of intellectual property rights especially copyrighted material. Similarly, smart contracts could be used in the car rental sector.
Bitcoin could be widely accepted in future replacing conventional currencies. This would particularly happen if central banks embrace blockchain technology.
- Monopolistic Cartel
The possibility of a private blockchain run by banks could be just another payment consortium controlled by cartels. Similarly, banks may end up becoming the custodians of cryptographic keys negating the transparency that should come with blockchain.
- Possibility of a 51% Attack
The bitcoin network could be compromised because if more than half the nodes decide to tell a lie, they would have their way. This is what Satoshi Nakamoto referred to as “51% attack” when he launched the network.
Blockchain may be unsustainable due to lack of adequate storage space or the cost of storage. The chain increases with every transaction and an increase in transactions would make matters worse.
While we have not discussed everything about bitcoin and blockchain, we have at least demonstrated that although they have great potential, there is much that remains to be done.