Bitcoin: Success or Fad
Although Bitcoin’s short history has shown great promise, the longevity of this first cryptocurrency is to be determined. As with many initial innovations, Bitcoin is the first in a line of cryptocurrencies where others, such as Ethereum, are building upon that platform. Cryptocurrencies are still not widely accepted and until this happens, Bitcoin and others might find it difficult to survive.
Blockchain’s innovative distributed ledger enables dispersion through a multitude of computers in the network, therefore eliminating a single administrator or hub. The use of this peer-to-peer network has the potential to eradicate third-party certifying organizations, such as a financial institution. According to Blockchain: Double bubble or double trouble?(2016), “Blockchain uses cryptography and the power of distributed computing to provide a digital trust mechanism over the internet” (p. 59). This ledger registers unique transactions that, although they are private, can be authenticated.
Where did it come from?
The popularization of blockchain began with the work of Nakamoto (2008), Bitcoin: A peer to peer electronic Cash System, which demonstrated how this technology could be used to develop cryptocurrencies. Although it is uncertain if Nakamoto is a pseudonym for an unknown person or a group, the paper published is largely credited with the introduction of Bitcoin in 2009, the first application of Blockchain (Marr, 2018). According to Marr (2018), Blockchain began to separate from Bitcoin in 2014 with the insight that it could be used for more than cryptocurrencies.
Blockchain and Innovation
According to Nowiński and Kozma (2017), blockchain’s original application was in the form of cryptocurrencies such as bitcoin, but its uses extend far beyond that of the financial industry of which some are still being discerned, although many, like the music industry, have already begun to utilize. The highly secure, seemingly unhackable technology decentralizes autonomous systems/services providing a trust mechanism that underpins a self-using and self-organizing system. Blockchain has the potential to create a systemic disruption that has not been witnessed since the inception of the internet (Nowiński & Kozma, 2017).
Blockchain: Double bubble or double trouble? (2016). ITNOW, (March)
Marr, B. (2018, February). A Very Brief History of Blockchain Techonology Everyone Should Read. Forbes.
Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Www.Bitcoin.Org
Nowiński, W., & Kozma, M. (2017). How Can Blockchain Technology Disrupt the Existing Business Models? Entrepreneurial Business and Economics Review