What is a Blockchain?
A blockchain is basically a digital and decentralized ledger that can record virtually any type of transaction between 2 parties in an efficient, verifiable, permanent, and secure way. The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and implemented in 2009 as a core component of the digital currency Bitcoin, where it serves as the public ledger for all transactions. 🙂 Since the creation of Bitcoin, the tech community has found other potential uses for blockchain technology. It can also assign title rights by providing a record that compels offer and acceptance.
The Rise of Blockchain Technology
Each of the Big Four accounting firms is testing blockchain technologies in various formats. Ernst & Young has provided cryptocurrency wallets to all (Swiss) employees, installed a Bitcoin ATM in their Switzerland office, and accepts Bitcoin as payment for all its consulting services. The CEO of Ernst & Young Switzerland stated, “We don’t only want to talk about digitalization, but also actively drive this process together with our employees and our clients. It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, [to] smart contracts and digital currencies.” PricewaterhouseCoopers (PwC), Deloitte, and KPMG are all currently testing private blockchains.
One way to ride the blockchain train is to invest in cryptocurrencies that use this technology. There are many to choose from, but the most popular ones are Bitcoin, Bitcoin Cash, Ethereum, Ripple, Litecoin, and Dash. They are all a little different. Bitcoin, for instance, is mostly used as a payment platform and may not be particularly scalable beyond being used for payments. However, Ethereum may have considerably larger aspirations because it’s an entire platform that enables savvy developers to build and deploy decentralized applications and smart contracts. With no central point of failure and secured using cryptography, applications are well protected against hacking attacks and fraudulent activities. The digital token used to buy for services on the Ethereum network is called Ether. There’s a saying that Ether is to Bitcoin as silver is to gold.
So last week I decided to buy 4 Ether. 🙂 I think the Ethereum platform has a lot of potential, but speculating in the nascent cryptocurrency market is akin to gambling due to its high risk nature. This is why I didn’t buy much.
I am now the proud owner of Ethereum. Yay! 😀 Maybe I will buy more if the price of ETH drops lower someday.
According to the fool.com, the Enterprise Ethereum Alliance (EEA) was created earlier this year in February. Its goal is to allow companies to take advantage of the scalability, security, and confidentiality of Ethereum’s blockchain technology. Some of the founding members include JPMorgan Chase, Microsoft, Intel, Accenture, BP, and Credit Suisse.
Since inception, the EEA has “grown into the largest open-source blockchain initiative in the world. As of July 18, total membership in the Enterprise Ethereum Alliance exceeded 150 organizations.” The newest brand-name members to embrace the Ethereum platform include Cisco Systems, Scotiabank, and MasterCard. 🙂
Support from large corporations helps legitimize blockchain technology and the digital currencies that run on it. I regret not buying Ethereum earlier. At the start of 2017 Ethereum was trading at $8 US. But by June it had climbed to $408. 😮 Screw me sideways! That’s a 5,000% gain! It has dropped a lot since then because the Chinese government decided to crack down on cryptocurrencies and initial coin offerings (ICOs). As of the past few days Ethereum is trading around $250 US.
Owners of Bitcoin, Ethereum and other digital currencies have experienced a rough roller coaster ride so far this year. It’s hard to know where cryptocurrencies will go from here. But in the long run I think they will become even more popular. 😀