Is Blockchain Offering Us Safe Investment?

People use the “roaring 20s” to describe the exciting turn of technology in 1920. We designed band-aids, radios, and traffic lights. Now, in 2021 we are again at the turning point for advancements in technology. Blockchain is just one of the many things that are propelling us into the future. Blockchain is widely unknown, and if they are talked about it is with confusion and misunderstanding. On the other hand, though most people have heard of cryptocurrency, Bitcoin, Ethereum, and Litecoin just to name a few.

 Both of these services work hand in hand to create a safe experience for the user. There are a few different types of blockchain: public, private, and commercial. I will be assessing the complications and solutions associated with blockchain through the use of comparison towards Bitcoin, the proclaimed “granddaddy of crypto”. I will be doing this because Bitcoin uses blockchain in their services to provide money transactions, however, there are many other uses for blockchain some of which are; smart monitoring and tracking of supply chains, safe data sharing among users, and a digital wallet or digital I.D that is extremely easy to use. 

Cryptocurrency and therefore blockchain as a whole is an underappreciated, and unsociable topic. It has a lot of misinformation and false facts out in the world that people use to base their opinions on, which creates a negative reputation.  Blockchains come with a variety of benefits to help the user but as with all new ideas and concepts, it also comes with a field of confusion and mistrust. Many users use blockchains in relation to cryptocurrency; Bitcoin, PeerNova, and Tradeblock just to name a few. Millions of people use services like Bitcoin on a daily basis for everyday transactions. The limitations of the digital world are nonexistent. I can send ten bitcoins to my friend across the country, and she can send five bitcoins to her dad while he is at work. This all happens within a matter of seconds. 

According to a survey done by a Russian Cybersecurity firm called Kaspersky, less than 10% of the worldwide population understand the basics of cryptocurrency. That evens out to be about 1 in 10 people. Roughly 90% of the population is in the dark on this topic and because of this, it creates confusion and fear where there should be understanding. This is not an easy topic to learn let alone get involved in, there are too many moving parts. This is one of the downsides of blockchain technology: lack of comprehension. 

Most people specialize in one thing; teaching, maintenance, finances; so for someone who teaches children how to cook, blockchains are out of this world and impossible to understand. The only “real” solution to this is to just give people time to get to grasp the concept. It took years for the cell phone to become a normal household item and some elderly still refuse to carry anything beyond radio for the news. We can help speed along the process through a bigger social media presence, news interviews, magazine covers. These all will help give the exposure blockchain needs to thrive, but they will not solve the misunderstanding of the people who are not online. 

Blockchain is a complicated process, so for someone to master the topic is highly unlikely. They need to move blockchain into the world of education, they already have some classes in the college level, but people need to be exposed to it the moment they get their first job, their first paycheck. This means adding courses or basic introductory units in high school. If you do this then it will help dramatically with the understanding process, and if we don’t, eventually people will get blockchain concepts, just not as fast. Transaction speeds for financial purchases are a massive part of the system. Blockchain transactions are working at 7-10 processes per second compared to VISA at 24000 processes per second. This means 7-10 people can buy something per second with Bitcoin versus 24000 people with VISA. Yet somehow blockchain technology is rigged to take over the financial sector of the economy. They will do this by being is more reliable and trustworthy than typical credit card transactions or banking operations. 

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Blockchain operates on immutable data for its customers and allows the customer to see the full history of the item they are purchasing through tracking of the supply chain, assuming the seller is also operating on blockchain systems. So even though the typical VISA card is faster for transactions, blockchain allows a more secure as well as detailed experience. As the demand for cryptocurrency grows the transaction speeds will increase as software is updated and improved. Bitcoin on average processes 300,000 transactions daily, so roughly 3.5 transactions per second. VISA does 1,700 transactions per second on average. So even though VISA has a much faster processing speed, Bitcoin is well within its limits for transactions per second. This means if you were to purchase something with Bitcoin, you won’t have any difficulty during the transaction process and won’t experience a delay. Ethereum is a more developed form of cryptocurrency that uses blockchain systems, and it can have 20 processes per second. 

The reason people refer to Bitcoin more often over the more advanced Ethereum is due to the fact that Bitcoin is older and is more widely known among the younger generation who use social media more often than those investing and using cryptocurrency.  People use hacking as an excuse for not using digital currency and after the 2014 Bitcoin hacking, most people were reluctant to get back into the world of digital money. MtGox was accountable for 70% of the transactions made through Bitcoin during 2014. Earlier in 2010, they lost 2609 Bitcoins due to an incident where they didn’t have the security keys to an unknown address and this resulted in losing $1,217,533 worth of Bitcoin. 

After years of regaining the trust of their consumers, they were hacked and lost an extremely large amount, 750,000 Bitcoin, worth $350,000,000. MtGox filed for bankruptcy and no one was paid back with the money they lost. This created a negative impression of cryptocurrency and blockchain interactions as the most media attention the new technology had ever had was about hacking. New blockchain systems have created safety measures to make future hacking almost impossible; with a cleverly designed system of multiple information checks, the safety of your money is almost untouchable. You can keep your transactions completely private and secure through a digital wallet which allows the seller and you to access the information needed without a third-party system. Your digital footprint is limited to an IP address and the seller’s IP address, but they aren’t exactly your IP addresses, they are designed to protect your privacy and location, which means they are “fake” addresses. 

Only you and the person you bought from or sold know they are there. If you were to compare the amount of successful hacking cases per year on a VISA credit card to a Bitcoin account, Bitcoin would have VISA beat by a large margin.  Blockchain is a new and safer form of buying items. It is more complicated, but that is what makes it so secure, so we need to take the time to understand even just the basics of blockchain and cryptocurrency in order to keep ourselves from being hacked or tricked into sending money to a phisher. The lack of understanding of this new technology is a severe drawback to the online world, we have everything else online; our doctor’s appointments, our schools, and our jobs. We do our best to make the online presence we have, safe and trustworthy but without blockchain, we stand a greater chance of being deceived.

Disclaimer: This content does not necessarily represent the views of IWB.

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