Cryptocurrency has been a new buzzword in the past few years. Bitcoins rapid rise and losing more than half its value at its peak has brought attention to the world of digital currency. Digital currency’s creation was born in mystery. Satoshi Nakamoto is credited as the inventor of Bitcoin which was the world’s first cryptocurrency. However, all efforts to find the creator have failed. The real identity of bitcoins founder has never been publicly verified. Nevertheless, in 2008 Nakamoto and a group of people helping him, referred to as the cyberpunks, successfully created the world’s first cryptocurrency.

The way cryptocurrency works is by using encryption techniques to verify the transfer of funds and the creation of the currency. These encryption techniques have been known simply as blockchain technology.

The mainstream media focuses on the amount of money going into cryptocurrency and their rise in value. There has even been a huge amount of press involving Initial coin offerings (ICO’S) and the success of emerging new cryptocurrencies. What is missing from the media and the public’s hysteria with cryptocurrency is the conversation about the implications of the technology behind the currencies.

Blockchain Uses

There is no doubt that blockchain technology will revolutionize many aspects of the way we do business and use computers. To put it simply Blockchain is a decentralized ledger that uses a network of computers to create a bookkeeping platform or ledger that is currently unhackable. This helps promote transparency and removes the need for centralized control.

An immediate use of Blockchain technology outside cryptocurrency is to help protect networks that are vulnerable to hacking like centralized email. With the use of blockchain technology with the backing of venture capital firms the potential to enhance privacy is exponential. However, there are numerous ways this technology can change the future. Companies like IBM and JP Morgan Chase are attempting to utilize this technology for a variety of purposes like private storage, distributed ledgers or decentralized voting.

A survey conducted by IBM suggested that around 16% of healthcare executives plan on implementing blockchain technology within the next year. The rational for this decision is to create more efficient operations thus lowering patient cost. When it comes to medical records generation coding it into blockchain can prevent unintentional altercations increasing integrity. Also, this technology as the ability to help share patient information faster and easier. Reducing redundancy when it comes to sharing or accessing patient information also decreases errors.

Retail supply chains are the next big thing blockchain technology will revolutionize. Tracking goods with distributed ledger technology will allow both security and unprecedented transparency. Just looking at one example of McDonald’s contaminated salads and wraps mass recall, with blockchain technology pinpointing every contaminated item to control costs would be relatively easy. However, using current methods McDonald’s potentially had to destroy uncontaminated products just to be safe. Look no further than Toys R Us or Borders to see what happens to companies that don’t adopt best practices when it comes to their operations.

Potential downsides

When it comes to private blockchains the main downside is the blockchain creation tools on a private server. If a hacker successfully controls these creation tools, then they would essentially have 100% control of the entire network. From there the hacker would be able to alter any transactions allowing them to do whatever they wanted. Aside from the vulnerability of the creation tools, the incentive to use more power to discover blocks faster creating a better experience for customers is nonexistent. As a result, in-house blockchain solutions may just be looked at as a hassle.

Another downside when it comes to the blockchain technology is the amount of energy it uses. When looking at the amount of security it provides compared to the energy needed, some experts believe that blockchain is terribly inefficient. Bitcoin Energy Consumption Index claims that a single bitcoin transaction uses enough energy to power 31 US households for an entire day. As a result, the use of bitcoin and blockchain technology will need to be much more efficient to be able to be used on a wider scale.

The Future of Blockchain

The development of blockchain technology has a wide variety of uses. No one can be sure exactly how blockchain will impact our lives in the future, but in the short term, it’s changing how money is transferred and how we protect information. However, with this technology still in its infancy stages we are just finding out how to best use this new tool. It is clear to see that analyzing the value blockchain provides that these uses will grow and change.