Blockchains, Initial Coin Offering, Mining, Bitcoin : What is this that people Talk of?
(Finally Back to writing after a hiatus)
Towards the end of the last year, we all read news of Bitcoin, the currency that rose up in value by almost 1500% in a year. FOMO (Fear Of Missing Out) crept in and many of us even started to look for opportunities and places to buy them. Not to blame, but this was so evident as the Crypto market in totality rose from a $19 Billion at the beginning of the year 2017 to $600 Billion at the end of year 2017 (source: Coinmarketcap). No market ever had seen such a growth. But the question still remains, what exactly is this technology and what has this technology got to offer. What let to rise in this technology, because of which the crypto market saw a multi-fold investment.
Before we begin, it becomes important to know what block chain is. Blockchain, not just literally, means a chain comprising of blocks which are linked throughout the chain using a hidden language (you see, this is where the prefix "Crypto' came from). These links can be only be verified and build by those who are authorized to decode the language. This also means that, even if the data of the block chain i.e. blocks are given to any person, it is of no value as it cannot be deciphered, which is the most important aspect of this technology.
The relevance of this technology can be understood if we analyse the current practices & implications of the database platforms. Whenever we save any document in say our gmail or yahoo account, we entrust them with our data in a readable format in their terms and conditions, which become open to them to read and analyse.Them being free platforms, it becomes important to add a source of income in order to maintain and expand the platform and improve the user experience. How do they do that? Of course by selling the information from the data we have stored with them to the ones who want to buy them. I guess this explains why we see those ads on our browser when we search something on google or yahoo or even more recent, acquisition of watsapp by Facebook in a whopping $19 Billion deal. This clearly puts our privacy to risk and necessitates the need of block chain technology.
On 31st October 2008, a white paper was published by some person named Satoshi Nakamoto (who in reality doesn't exist by the name) that proposed a peer-to-peer electronic cash system. This system aimed at introducing a currency that will surpass the financial institutions system and can be used as a form that can be directly be transferred as a form between the buyers & sellers. The white paper also laid down various principles and procedures on how this can be verified and put to use in real by laying down a network of transaction, called ledger, which will be stored in an open source, every CPU that runs with the client. Thus Bitcoin was one of the first currency that used this block chain technology.
Now a days, many startups & established institutions have started to come up with a product/ledger in offering have claimed to have the best public ledger based on block chain technology. The system they offer claims to solve a particular issue and give a different user experience. In order to fund this, they undergo an Initial Coin Offering, which is a means to raise a capital at a certain initial price without going through the strict and rigorous methods used by Financial Institutes. All is needed is a listing & trading platform.
Once the ICO is launched and coins are offered, manpower is needed to validate the transactions across the network by solving the complex equations and in return avoiding any double-spending (duplication as we know it). Miners also add more currency to the chain as time progresses up to the maximum limit as per the requirement of the network.
Yes questions still arise on the legality or functionality of such networks as they work on a technology that cannot be properly monitored due to its nature of secrecy, but still people are will to use this as a mode, as it doesn't violate their privacy as being done by other database platforms.
With implementation of block chain technology in just a currency market, we saw a huge Cryptocurrency market in the field of currency. Just imagine what wonders can be done when the technology is applied in other fields. We may in future see a CryptoIdentity - which may solve the Adhaar security issue if any, CryptoChain - a supply chain solution, CryptoRide- a peer-to-peer secure ride sharing network, CryptoVote - a network to make election process faster & cheaper, CryptoWelfare - a network to transfer public benefits in secure and quick manner.
With above said, 2018 already seems so exciting.