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10/07/2017

Dan Blignaut – Blockchain Adapt Or Die

Blockchain technology is a buzz word, right after the other buzz word, Bitcoin is mentioned.

For those that aren’t familiar with either term, here is a brief explanation. Blockchain is a structure where various stations, called nodes, collaborate as witnesses to verify transactions. For example, if someone wants to buy a pen from another person, in a room full of people, the people in the room can verify the legitimacy of the transaction and agree as witnesses, that the transaction is valid. No other authority is required.

In business, this removes the need for a service provider. The integral community or team can verify the legitimacy of a transaction or contract themselves. Therefore, any centralized business sector that has exclusivity and monopoly over a trade, like banking, insurance, legal and many other services, where a third party intercepts or processes a transaction for a fee, are
threatened with extinction.

But this is only in theory. At least, for now. In reality, customers will always want to have the option of utilising a third party service. Escrow services are vital services when trading in a virtual environment. This ensures trust and delivery. It also encourages more trade, which will drive down transaction fees. The downside is that escrow providers can set their own rates. The upside is that pressure by consumers’ freedom to choose, will create competitive rates.

Regulators have a responsibility to ensure that transactions and services are legitimate, and therefore must clearly comprehend the implications of ‘self-service’ financial and legal transactions. This bureaucratic process will take years to document and enforce.

There is a great need for a revolutionary solution in the transactional system. Whether it be legal or financial. Blockchain provides the building blocks for such a revolution.

Bitcoin is an encrypted transaction of value exchange, that allows two parties to trade directly, without a third party, in a decentralised environment, using the blockchain and its community
of nodes as verification of the fair exchange.

The ledger, or history of that Bitcoin trade, is recorded and transported with every subsequent
transaction. This means that, unlike cash trades, transactions can be traced for investigation
into contraband and illegal commodities. This makes Bitcoin more transparent than fiat currencies.

Many are of the opinion that Bitcoin is dangerous because it is not centralised and therefore cannot be monitored when being used to buy illegal goods or used for terrorist objectives. This
holds no value, because it is the individual’s intentions that make this illegal, not the currency.
Whether it be oil, dollars or any crypto currency.

The decentralisation, speed of transaction (10 minutes-1hour), extremely low cost relative to current facilities, and partial anonymity of crypto currencies is what is most attractive to parties
looking for alternatives to high banking costs, slow processing and over-regulation.

It is important to mention that the value of Bitcoin is NOT based on any Fiat or crypto currency,
like the US Dollar or the Japanese Yen or Monopoly Money. Its value is purely based on the faith and trust that people have in its value to them as a user. This should also be true as it initially was the case, with FIat currencies, but that has been manipulated by third party providers. The major difference is that Bitcoin and some Altcoins are the only currencies that are increasing in value and willing participants, while ALL fiat currencies have failed, or are failing to provide value, by losing all of their value over time.

Bitcoin Mining is where a group of people buy superfast hash processing computers and compete against each other to verify the validity of a transaction. The buyer then chooses which result satisfies the most trust in that result and rewards the relevant group with a transaction fee.

The investment is in the equipment used for mining and not in the currency itself. Just like investing in spades and digging equipment for mining, as opposed to investing in the value of the mineral. The currency value is irrelevant, but the recovery rate is key.

Altcoins, or alternative concepts and developments of Bitcoin, are rapidly releasing the potential of this form of internet trading. Attaching ‘Smart Contracts’ (Additional conditions in the ledger) to these currencies , is the real threat to antiquated enterprises, that need a shake up to accommodate the tsunami of modern, socially aware humans, set to become the majority of consumers.

Creating one’s own currency, much like vouchers of value, or loyalty points, can be created for exchange with each other, without the need for fiat currencies. Ultimately excluding banks, central banks and governments from this entire economy.

By participating in a decentralised, virtual economy that maintains certain levels of anonymity, this provides huge flexibility of choice for consumers and allows suppliers to utilise a shared platform to create more loyalty and value added services, directly with their customers. Bitcoin and its counterparts have generally soared in value in the last eight years, since the creation of Bitcoin, but remain volatile without downward pressure from competition.

With Bitcoin as the foundation, or currently perceived ’Reserve Currency’ of Internet Money, it is yet to be respected as an investment by general stock or forex traders. With the recent local government approved stock exchange listing of Bitcoin as a currency by Japan, and Russia and
South Korea recognising Bitcoin, not as a currency, but as a legal payment method, alarm bells
must be ringing and eyebrows surely raised in anticipation of opportunities.

A renaissance, where embracing new methods, new thinking and modernisation of processes, is essential to survival.

This is a time to make a choice to change perspectives, investigate, dabble, and move into a new space that includes blockchain and crypto currency in your future.

Coinswitch.info

 Dan Blignaut Blockchain Adapt or Die.JPG
 Dan Blignaut Blockchain Adapt or Die.pdf


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