So what is Bitcoin?
Bitcoin is a cryptocurrency and a digital payment system. Invented by an unknown programmer (or a group of programmers), it was released as open-source software in 2009. There is a market cap with Bitcoin. The value of an individual Bitcoin has increased substantially during this time, every year more and more merchants and vendors accept bitcoin as payments for goods and services, and millions more unique users are using a cryptocurrency (digital) wallet.
Why is there a worry about Bitcoin?
There are many concerns related to Bitcoin, price volatility, doubts around legal status, tax and (lack of any) regulation, Bitcoin has been notorious in criminal activity, and is well renowned for the role it has in cyber-attacks like Ransomware. But for believers, Bitcoin has huge upsides, de-centralised thus outside the control of a central authority, privacy, deflationary, low cost to transfer funds across borders, but most it is an attractive “store of value”.
Why is Bitcoin important?
Bitcoin is important because it requires a blockchain. A blockchain is an undeniably ingenious invention, but since Bitcoin, blockchain has evolved into something greater. And the main question every person is asking is – what is a blockchain?
So what is a blockchain?
The simplest explanation “Blockchain is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one.” Sally Davies, FT Technology Reporter.
How does blockchain work?
A blockchain is a distributed database that is used to maintain a continuously growing list of records, called ‘blocks’. Each block contains a timestamp and a link to a previous block. A blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retrospectively without the alteration of all subsequent blocks and a collusion of the network majority. Functionally, a Blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Don & Alex Tapscott, authors Blockchain Revolution (2016).
Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralised consensus has therefore been achieved with a Blockchain. This makes Blockchains potentially suitable for the recording of events, medical records and other records management activities, such as Identity Management, transaction processing and documenting provenance.
The entire financial, legal, and record-keeping industries are being disrupted using this decentralised, secure, and inexpensive method. It has therefore caught the eye of the Bank of England plus other large organisations including Microsoft, IBM and Cisco have consequently started to take note of it.
In summary the opportunities are infinite.
People need to understand that “blockchain” is NOT the same thing as “Bitcoin”.
Bitcoin was the first blockchain system designed, but there have been a number of others since then which are very different, designed by different people, often for different purposes. These people are in the business of designing things for use by corporations to operate their businesses to drive a competitive edge. This is no different to what Amicus ITS has been doing for 30 years, problem solving and designing solutions that deliver business value as we look constantly to the horizon at future technologies.