More than $2.3 billion has been invested in crypto startups to date. In 2017, alone, there were 2 billion of them. When you consider that the current market capitalization of all cryptocurrencies combined is only around 170 billion dollars, this is a remarkable sum. As a founder, this is reason enough to devote more time to the subject.
Bitcoin – a revolutionary blockchain concept
In press reports about Bitcoin, you can usually find stories about the cryptocurrency’s exciting ups and downs, the Darknet, where Bitcoins are used to pay, or the unsuccessful search for Satoshi Nakamoto, the cryptocurrency’s creator. Rarely does one read about Bitcoin as a revolutionary concept that has the potential to completely transform banking today. This technology is set to disrupt many things in our daily live. Things we thought were irreplaceable will become obsolete. Online banking, bill payments – all history. But, in order to do so, we must first believe in, accept, and be brave enough to use the new currency, the maximum number of which is set in the code at 21 million bitcoins.
Blockchain, a digital journal
The term was first introduced as a technology behind the cryptocurrency Bitcoin. The blockchain functions similarly to a digital journal, recording all Bitcoin transactions. When one person transfers virtual money to another, the transaction is recorded and stored on the computers of all participants in the blockchain. The same thing happens if some of the money is later transferred to a third party. All of this information is stored in a distributed manner. This gradually builds a chain of data blocks that cannot be deleted or changed later. The entire process operates like a bank without a middleman; participants independently verify the processes. Nobody has the authority to change the data. As a result, one of the digital coins cannot be spent twice. Counterfeiting the cryptocurrency Bitcoin is therefore in fact not possible.
And who invented the blockchain?
Satoshi Nakamoto created the blockchain and the cryptocurrency Bitcoin on top of it. In 2009, Nakamoto released the first bitcoin client and maintained contact with the bitcoin community until 2011. After that, he vanished without a trace. It is still unknown who is behind the alias. Since then, nearly 115,000 bitcoins worth 345 million US dollars have been stored in a wallet attributed to Nakamoto.
Blockchain is reshaping traditional professions
If the technology takes hold as expected, it will almost certainly have a significant impact on the labor market. To continue with the money transfer example, banks must reconsider. The number of bank customers who make a bank transfer has already decreased dramatically. There are also far fewer advisory services. Banks will thus become obsolete in their core function. Securities dealers, insurers, brokers, and notaries, to name a few, must all be completely reorganized and reinvented in order to justify their continued existence.
Of course, these professions will not vanish overnight, but even a gradual decline would be painful for those who work in them. Even if cryptocurrencies such as bitcoin do not ultimately triumph, the blockchain will find its way into almost every sector of the economy. Because it has the potential to reduce costs. Because a smart contract can replace a notary, music rights and royalty agreements can be handled more efficiently, as a middleman will be unnecessary in essential areas of life – not just with banks.