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Things We Find Interesting in Cryptocurrency

Mar 30

Bitcoin 2.0

By Raymond Prince

The underlying technology that powers Bitcoin, namely the distributed consensus network, has potentially world changing consequences for the way transactions or transfer of value occurs. Keep in mind that the Bitcoin network is a decentralised trustless network of peers who take away role of authenticating transfers from centralised instituations and shift that responsibility onto each and every participant of the network. When is the last time you needed to do a large money transfer? Perhaps you've purchased a home or a second hand car? The time it takes for such transfers of value can be painful and expensive. Lawyers and brokers must confirm ownership of the seller, and go through many channels in order to change ownership over to a second party. Even after this entire process, this data is still vulnerable to a host of issues, ranging from human error and negligance, to natural disasters wiping out records.

Many familiar with the Bitcoin protocal and its underlying technology have now recognised that if Bitcoin transactions can be cryptographically confirmed with 100% certainty, cheaply and realtively quickly, why can't the same principle be applied to transfers of value besides Bitcoin or electronic currency. This has given rise to term Bitcoin 2.0 which aims to leverage this decentralised network to confirm ownership and transfer of houses, cars, bikes, art, stocks, bonds, and even art. The blockchain which is essentially an open ledger cannot ever be falsified or modified, without the network becoming aware of the false changes and discarding such changes. This has the additional benefit of providing a timeline etched into stone which can be used to confirm intelectual property ownership or trade mark applications. This also makes contract confirmation a quick and easy process. It can be applied to any contract, employment contracts, purchase agreements, lease agreements etc. This not only saves time, but also bypasses large legal costs associated with writing up and confirming such contracts.

This massive network of decentralised nodes can be used to validate any transaction whether electronic funds or other forms of value. However, there are other concerns, namely the incentive that the network has to confirm such transactions, and also whether this incentive is enough to counter the ever rising costs of mining. These additional features also have the byproduct of increasing the blockchain size, which brings into question scalability and decentalization issues.