Blockchain’s Year will be 2018
    Category: Column By : Rainer Michael Preis Read : 601 Date : Thursday, January 04, 2018 - 14:55:52

    Blockchain is a foundational technology: It has the potential to create new foundations for our global economic and social systems. Blockchain and cryptocurrencies are now entering today’s mainstream economic reality. Bitcoin is not simply a digital currency, but a network of trust that provides much more than just currency. To say Bitcoin is only a currency is the same as saying—in 1995—that the Internet was mostly for e-mail. The growing realization that crypto assets like Bitcoin is not just currency, but a decentralized censorship-resistant globally distributed trust network is behind Bitcoin appreciating 1,700% last year.

    At the end of 2017, several global banks moved their trade finance operations onto Blockchain technologies and the Australian Securities Exchange (ASX) announced that it will be the first mainstream financial market to adopt this technology. CME also recently launched Bitcoin futures trading. One G7 country embracing Bitcoin is Japan, with over 300,000 Japanese retailers and companies accepting Bitcoin for payments, and last year Japan made legislative changes accepting Bitcoin as a legal payment, further highlighting Bitcoin’s growing popularity in Japan.

    Russia announced that buying and selling Bitcoin, and other cryptocurrencies, would be legalized and Kazakhstan and its AIFC (Astana International Financial Centre), in an innovative move, are tailoring its regulations around Blockchain assets and cryptoeconomics. Indonesia’s central bank in December said it had issued a new regulation prohibiting the use of cryptocurrencies—including Bitcoin—in Indonesia, as their rising popularity raised concerns over unwanted effects on the Indonesian economy. Nigeria’s Central Bank faced similar issues but has publicly stated that it cannot control or regulate Bitcoin. “Just the same way no one is going to control or regulate the Internet,” the bank said.

    This is a sensible, correct and forward- looking approach that will most probably get more traction in 2018. The concept of consensus takes Blockchain technology and effectively transposes it into many other sciences and humanities. This new area of study is multidisciplinary in nature, and the number of encompassed subjects is growing and is commonly called cryptoeconomics. Although Blockchain can have a large impact on the way transactions and ownership are recorded, it is important to note that there are actually two types of Blockchains: public and private Blockchains.  On a public Blockchain, all parties engage with each other directly on a peer-to-peer basis and there is no intermediary. There are also no barriers of entry to a public Blockchain. On the other hand, private Blockchains do have barriers of entry and a “gatekeeper” who governs the access to the Blockchain. The analogy here is Intranet versus Internet. In the mid-1990s many banks and institutions said they didn’t like the Internet because nobody controls it, but we like Intranets that can be controlled. This is the same today, as banks say they like Blockchain but we do not like Bitcoin. The realization that private Blockchains  (Intranets) cannot fully work without public Blockchains  (Internet) will lead to increased mass adoption of Blockchain crypto assets in 2018.