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Bitcoin and why its so important

 The Bob Pritchard Column 

Everywhere you look these days there are references to Blockchain…but you probably wonder what the hell is it. It is the technology behind one of the 21st century’s most remarkable social and financial innovations: the cryptocurrency.
 
It all started with Bitcoin just seven years ago when the world’s first digital currency, or “cryptocurrency,” only carried a few cents in value. Today, after years of price appreciation, a bitcoin is valued at close to $8000.   The reason behind this explosion in demand all goes back to the fundamental technology that lies at the core — the revolutionary public ledger that makes Bitcoin and dozens of other cryptocurrencies so appealing to both end-users and businesses.
 

 
But what is it, exactly?
 
Currently, digital transactions like the kind you might execute on a daily basis using a credit card have to go through a bank as an intermediary. That’s where the transaction is authenticated, processed, and catalogued.  What blockchain allows is for consumers and suppliers to connect directly, eliminating the need for the centralized third party. Taking a rather democratic approach to ensuring security, blockchain provides a decentralized database, or “digital ledger,” of transactions that everyone on the network can freely access.
 
This network is a chain of computers that must all approve an exchange before it can be verified and recorded, making it virtually impossible for a hacker to counterfeit a transaction — something they can easily do using traditional credit cards. And because this blockchain network is independent of any government agency or bank, the transactions cannot be tracked, regulated, or taxed.
 
The result is a 100% secure, 100% sterile means of exchanging currency for goods or services; and since the first-ever transaction was recorded in 2010, tens of thousands of businesses worldwide have started processing transactions using the world’s most popular digital currency: Bitcoin.
 
That astounding rate of commercial adoption has been the main driving force behind Bitcoin’s skyrocketing market capitalization, which today stands at $125 billion.   This growth represents the fastest gains ever, with Bitcoin appreciating a total of 8,666,000% in the seven years between the first-ever commercial transaction and today. But blockchain and the opportunities it opens for a first-ever decentralized currency are too big for just one coin. 
 
This year, Ethereum, another cryptocurrency operating on the same principal, also saw incredible price growth as it rose from $10 back in January 2017 to $300 today. The second biggest cryptocurrency by market capitalization, Ethereum’s total value is now $28 billion, with more than 96% of that market capitalization created in just 2017 alone.
 
Today, there are over 1000 digital currencies out there, with market capitalizations ranging from billions down to less than $1 million.
 
Many are highly specialized, designed for specific types of transactions, some even the by-product of work at government agencies like the Department of Defense. This explosion in diversity of product further cements cryptocurrencies as a revolutionary shift in the way value is stored, transferred, and exchanged — perhaps the most important such shift since the invention of paper money itself.
 
In the next decade, blockchain is going to play a pivotal role in evolving the way business is done, both domestically and across boarders, and many of those 1000+ cryptocurrencies will explode in value to fill the demand of an ever-growing volume of transactions.
 
“Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value”   Eric Schmidt, CEO of Google
Posted on November 9, 2017

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