Bitcoin Evolution Vs Revolution

Bitcoin: Evolution or Revolution?

Learning Objectives

· To investigate the perceptions of Bitcoin and Blockchain Technology.

· To investigate Bitcoin alongside previous technological advances to gauge a measure of realisation.

· To investigate the potential success or failure that may lie ahead for Bitcoin.

  

 Introduction

The year of 2008 is marked as a significant point in the man’s financial history, the collapse of the global economy caused many leading economists to deem this event the most serious since the Great Depression of the 1930s.

Lehman Brothers Holdings Inc was a global financial services firm, founded in 1850, and had a prosperous and successful history. Lehman Brothers Holdings Inc subsequently collapsed on 15th September 2008.

Shortly after on 18th August 2008, the domain name bitcoin.org was registered. This was closely followed by the release of a whitepaper named “Bitcoin: A Peer-to-Peer Electronic Cash System” on 31st October 2008 to a cryptography mailing list. The creator was an anonymous person (or group of people), referred to as Satoshi Nakamoto.

The timing on the release of the whitepaper is significant in that it appears to be a reaction offering an alternative remedy, if such a financial crisis could happen again. This new concept looked to offer people another option instead of relying on the large institutional and capitalism systems, that people are often raised on trusting with question.

Despite this, many people both outside and inside the world of cryptocurrency have major doubts on its creditability. It is understandable that people who are unfamiliar with cryptocurrency and Bitcoin, could doubt a subject that they do not understand. Resistance to any sort of change is a common trait of human behaviour. It way come as a surprise that some participants embedded deep in the world of cryptocurrency, also do not fully believe in Bitcoin. The main narrative on this is that the believe in the blockchain technology and not cryptocurrency and Bitcoin itself.

This article will investigate how Bitcoin and blockchain technology are currently perceived and possible future paths of more mainstream adoption. The article will also focus on Bitcoin (and not cryptocurrency in general) due to it being the most established cryptocurrency, and the fact that many cryptocurrency tokens have little, if no case use, and will eventually become obsolete.

Main Body

To be able to imagine the true potential of Bitcoin is typically what discourages many people from the idea, that it can be one day be truly adopted into everyday life. To be able to imagine this is not fathomable to fractions of wider society, hence when there are ground-breaking advances that disrupt, adjust and finally better mankind, it is down to the visionary intellects to drive adoption against the colossal resistance to change.

For ordinary folk such as you and me, how do we get our minds engaged with this unthinkable concept? Well, a good way to determine its potential, is to draw parallels from something similar in terms of scale with comparable characteristics. What better place to start than the Internet and the World Wide Web?

The Internet and the World Wide Web

The World Wide Web became recognised in 1990 due to the work of inventor and computer scientist Tim Berners-Lee. The World Wide Web and the Internet are often mistaken.

The World Wide Web is actually just the utilised method of accessing data online in the form of websites and hyperlinks. The web helped expand and familiarise the wider world with the Internet, and serve as a crucial step in developing the vast trove of information that most of us now access on a daily basis.

The Internet was in fact the collective work of many pioneering scientists, programmers and engineers, who each developed new technologies, that eventually merged to become the “information superhighway” we know today.

The truth is that the Internet has been in the thoughts of visionaries for over 100 years. The far-sighted Nikola Tesla (pictured below) toyed with the idea of a “world wireless system” in the early 1900s. This notion was later developed Paul Otlet and Vannevar Bush in the 1930s and 1940s in mechanism used for searching for storage systems of books and media.

The first practical schematics for the Internet were delivered in the early 1960s. Joseph Licklider (pictured below), an associate professor at the MIT Massachusetts Institute of Technology (MIT), promoted the idea of an “Intergalactic Network” of computers. This was then developed by a team of computer scientists into a concept known as “packet switching”. This allowed the effective transmission of electronic data that would subsequently become one of the central building blocks of the Internet.

In the late 1960s, the Advanced Research Projects Agency Network (ARPANET), along with original funding the U.S. Department of Defence, created the first workable prototype of the Internet. Packet switching was used to allow multiple computers, with no centralised headquarters, to communicate on a single network. This was at the height of the Cold War.

Further developments in the 1970s by Robert Kahn and Vinton Cerf (Transmission Control Protocol and Internet Protocol) and ARPANET in the 1980s, allowed the adoption the TCP/IP on 1st January 1983. This assembled “network of networks” that became the modern Internet.

This story of the development in the Internet would be extremely difficult for the majority of people to comprehend, so in applying this way of thinking to Bitcoin, what does this mean for its future development? Well let’s find out.

Bitcoin

To the current day, Bitcoin is a little over 10 years old. Although many feel Bitcoin has significantly developed over this period, in comparison to the Internet, Bitcoin remains in its infancy and is still trying to find its place in the world. Cryptocurrency and Bitcoin as an asset class is also miniscule when compared even to the market cap of many leading blue-chip stocks. These things take time to develop, or they dissolve and disappear.

In the whitepaper by Satoshi Nakamoto, Bitcoin was referenced as being “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” This remains a valid use, thought there are also other cryptocurrencies that do this both cheaper and quicker.

The amount of Bitcoin currently being traded in Venezuela is at an all-time high, and this is likely due to the unimageable financial crisis that the country is going through. The annual inflation rate of Venezuela in February 2019 was 2.30 million percent.