BLOCKCHAIN & CRYPTOCURRENCY TECHNOLOGY (BITCOIN, ETHEREUM, …)
Investopedia defines blockchain as digital information (the “block”) stored in a public database (the “chain”). “Blocks” on the blockchain are made up of digital pieces of information. Bankrate defines blockchain as a digital, public ledger that records online transactions. Blockchain is the core technology for cryptocurrencies like Bitcoin and Ethereum.
Merriam-Webster dictionary defines blockchain as a digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network.
A blockchain ensures the integrity of a cryptocurrency by encrypting, validating, and permanently recording transactions. A blockchain is like a bank’s ledger, but open and accessible to everyone who utilizes the cryptocurrency it supports. Furthermore, a blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain).
Currently blockchain is being used by various companies from different industries however, more daring entrepreneurs who are willing to put a lot at stake will take this technology far beyond what we have witnessed so far. In a sense, when the Internet was first created, many companies simply put a number of websites together and assumed that will generate new business. Unfortunately, such assumptions are still true today as many websites are not visited due to the lack of understanding and commitment. Any product or process needs time and dedicated resources and blockchain is no different.
World’s Oldest Blockchain?
No, the answer is not Bitcoin. In fact, the world’s oldest blockchain predates Bitcoin by 13 years and it’s been hiding in plain sight, printed weekly in the classified section of the New York Times.
The authors of a paper titled How to Time-Stamp a Digital Document (1991), Stuart Haber and W. Scott Stornetta wrote about the “prospect of a world in which all text, audio, picture, and video documents are in digital form on easily modifiable media raised the issue of how to certify when a document was created or last changed.”
They envisioned the technology as a way to timestamp digital documents to verify their authenticity. The solution was to run the document through a cryptographic hashing algorithm, which produces a unique ID for the document. Eventually, Haber and Stornetta created their own timestamping service called Surety. Surety creates a unique hash value of all the new seals added to the database weekly and publishes this hash value in the New York Times.
Satoshi Nakamoto (Bitcoin/BTC)
Satoshi Nakamoto is the anonymous name used by the creators of the Bitcoin cryptocurrency. The paper that first introduced Bitcoin is titled Bitcoin: A Peer-to-Peer Electronic Cash System.
Major takeaways from the Bitcoin White Paper:
- A Peer-to-Peer Electronic Cash System
- Distributed ledger that allows for validation to be achieved without the need for a third-party intermediary, such as a bank.
- “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
- Finally resolved the double-spend problem thus making sure that an online payment was only spent once.
- “In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions.”
- Data are collected in blocks which are added to a chain of previously validated blocks.
- What Bitcoin aims to accomplish is to, in some way, replicate the simplicity of an in-person transaction in an online environment.
- “Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key.”
- Wallet setup with both a Public Key and a Private Key
- “A timestamp server works by taking a hash of a block of items to be timestamped and widely publishing the hash…”
- “To implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proof-of-work system…”
- SHA256 hashing algorithm – converts data into string of characters that uniquely identifies block
- Outlines incentives for miners
- A mere decade from now, nearly 97 percent of Bitcoins are likely to have been mined. But the remaining 3 percent will come into existence during the next century and the final Bitcoin is said to be mined around 2140.
Blockchain 101 – A Visual Demo
The best visual demonstration that explains how a blockchain works is done by Anders Brownworth. Anders Brownworth works in applied research at The Federal Reserve Bank of Boston. Previously he worked with cryptocurrencies at Circle as its Chief Evangelist and taught blockchain technology at MIT. He helped create and launch Republic Wireless, a WiFi / cellular hybrid smartphone service.
Blockchain 101 – A Visual Demo
Blockchain 101 – Part 2 – Public / Private Keys and Signing
Blockchain & Finance
Blockchain can streamline banking and lending services, reducing counterparty risk, and decreasing issuance and settlement times. It allows: Authenticated documentation and Know Your Customer (KYC) and Anti-Money Laundering (AML) data, reducing operational risks and enabling real-time verification of financial documents.
Although we have come a long way about the critical relationship between blockchain and finance, we have only touched the surface and so much more to come in the years ahead.
Some of the major attributes of this relationship will concentrate on the following concepts:
According to CBINSIGHTS, Banking Is Only The Beginning: 58 Big Industries Blockchain Could Transform. “What began as the basis of cryptocurrencies such as Bitcoin, blockchain technology essentially a virtual ledger capable of recording and verifying a high volume of digital transactions is now spreading across a wave of industries.”
Harnessing the power of blockchain will be critical for the following industries:
- Financial services (banking)
- Stock trading & hedge funds
- Crypto exchanges
- Wills & inheritances
- Loans & credit
- Travel & mobility
- Automotive manufacturing
- Car leasing & sales
- Aerospace & defense
- Air travel
- Industrial IoT
- 3D printing
- Construction, architecture, & building
- Real estate
- Energy management
- Health information exchanges
- Claims management
- Research & clinical trials
- Public sector
- Government & public records
- Gun tracking
- Law enforcement
- Federal mail
- Public transportation
- Waste management
- Public assistance
- Retail & Consumer Packaged Goods (CPG)
- Food & beverage
- Gift card & loyalty programs
- Agriculture & mining
- Crops & agriculture
- Animal husbandry
- Logging & timber
- Education, communication, & information services
- Education & academia
- Messaging apps
- Music/entertainment rights & Intellectual Property (IP)
- Video streaming
- Sports management
- Art – Non-fungible Tokens (NFTs)
- Cloud computing & storage
- Internet identity & DNS
- Internet advertising
- Human resources
- Business & corporate governance
Blockchain & IoT
DigitalVidya posted a blog titled Everything You Should Know About Blockchain in IoT by Anukrati Mehta that relayed the decentralization of the blockchain ledger ensures that computation and storage are spread across millions of devices and not on one central server. As a result, the situation where server failure results in a breakdown of the entire IoT network will no longer exist.
Blockchain for IoT can also be used to track billions of connected devices. There can be coordination and processing involving several different devices without having to go through the traditional client/server route for each communication. This will significantly reduce the costs of installing and maintaining servers for an IoT network. Due to these significant cost savings, massive scalability of IoT networks can now be a sustainable option.
Blockchain technology uses cryptographic algorithms. This will ensure that consumer data on the IoT network is secure and confidential. The blockchain ledger is tamper-proof and is therefore not vulnerable to cyber-attacks in the same way as traditional IoT networks. The use of blockchain in IoT also ensures that man-in-the-middle attacks can’t take place because there is no single thread of communication which can be intercepted.
Blockchain & Transportation
Winnesota, a transportation company posted a wonderful blog on how blockchain technology is being utilized titled How Blockchain is Revolutionizing the World of Transportation and Logistics. The problems that blockchain addresses from dispute resolution to administrative efficiency and order tracking, blockchain has the answer to the problems that have been plaguing the transportation industry for decades. Furthermore, on daily basis, there are $140 billion tied up in disputes for payments in the transportation industry. With net 30-40 days for payment, millions are tied up in accounts payable and receivables.
Processing and administration costs have risen to as high as 20% of transportation’s overall costs, due to over-reliance on paper transactions. Another major problem has to do with 8.5% of sensitive pharmaceutical shipments experience temperature deviations. Because of this, these products never make it past customs due to exceeding acceptable temperature ranges. 90% of trucking companies have six trucks or fewer. This causes the industry to struggle with matching shippers (the demand) with carriers (the supply). Because of this, it’s estimated that truckers drive 29 billion miles per year with partial or empty truckloads.
How does blockchain enables more efficient and cost-saving business operations? New Blockchain-enabled platforms will allow easy coordination of documents on a shared distributed ledger, making physical paperwork largely unnecessary. By using smart contracts, approvals and customs clearance can be quicker and more efficient, reducing processing times for goods at customs checkpoints.
Swiss Tech Firm SkyCell created blockchain enabled refrigerated containers that brought their temperature-deviated rate down to less than 0.1%. Organizations need updated, secure and authentic data to make decisions. Blockchain ensures trustworthy data across the transportation and logistics ecosystem, since the entire network contributes to data validation. With rising demand for same-day and one-hour delivery services, traditional tracking technologies will not scale. Blockchain technology provides a scalable, immediate solution for order tracking and authentication.
Organizations like Blockchain in Transport Alliance (BiTA) are working on creating universal standards for blockchain’s mass adoption in the transportation and logistics industry. BiTA members account for about 85% of all truck-related transactions in the U.S.
According to Ken Craig, VP of Special Projects at McLeod Software, stated in an article tiled Blockchain for Trucking (a BiTA member), “blockchain provides another aspect of interoperability and visibility within the supply chain, much like electronic data interchange [EDI], application program interfaces or web services… However, blockchain without its own truly inoperable standards will develop into nothing more than a new process that mimics the difficulties surrounding the use of EDI.”
Blockchain Business Opportunities
Maria Redka, a content manager wrote a fantastic blog titled Future of the Blockchain Technology: Use Cases, Risks and Challenges. After providing detailed information on topics surrounding blockchain, she lists a series of industries and derived benefits from blockchain:
- Financial Inclusion: underdeveloped countries without access to banking services, provide access to transactions and end the need for a physical infrastructure, increase speed, reduce fees
- Democracy and governance: voting, crowdfunding, communal services, registrars, and more can be put on a blockchain database for increased transparency
- Internet of Things (IoT): can reduce data lapses and improve the transparency and security of communication between devices as well as data storage
- Retail: improve supply chain goods tracking, and to prove the authenticity of goods by providing the ability to discern fake items from authentic ones by scanning a barcode
- Insurance: secure technology can be utilized to both detect and prevent fraud in the industry, and improve organization about property insurance claims, simplify user onboarding for new policies, or even open the possibility of having a universal insurance database
- Digital Identity: reduce identity theft and fraud, and promote transparency, reduce the threat of third-party involvement in sensitive personal data
- Agriculture: eliminating the need for middlemen in agricultural supply chains, records on food certificates, sustainability, and safety are recorded on paper and in private databases, blockchain can reduce fraud, decrease costs, and promote efficiency
- Education: create immutable performance records, transcripts, diplomas, certificates, etc., efficient means of accessing records and can also be used to help build recognition of achievements
- Energy, Climate, and Environment: increased data control and optimizing the efficient use of energy, support the peer-to-peer transfer of energy reserves in a transparent manner.
- Rentals and Ride Sharing: we’ve all heard of Uber; and while the service is useful, there is a major drawback in that it is centralized, and drivers must pay a fee to the Uber platform for each completed ride. Blockchain technology has the potential to revolutionize the ride sharing industry and to enable peer to peer car rentals and ride sharing.
- Philanthropy: transparency behind charitable organizations and philanthropic acts, not able to openly track the movement of funds, thus, figuring out if funds have been used properly becomes quite the task
- Healthcare: provide transparent and decentralized solutions for storing patient medical data, healthcare records, prescriptions, insurance plans, and coverages
- Real Estate and Land Rights: store information on purchased land, record ownership certificates, and provide a decent amount of legal and economic safety for real estate owners and land holders, existing projects that focus on tokenizing real estate properties to allow large quantities of individual investors to get a share of that property for future investment returns
- Entertainment: copyright infringement, piracy, and content consumption, using the technology and cryptocurrencies, artists, writers, and musicians could distribute their creative content on a global scale, while retaining full control over said content
Blockchain Smart Contracts – Ethereum
Anytime the question arises how can blockchain help business, smart contracts end up a part of the answer. These “mini-programs” automatically execute agreements between various parties when certain conditions are met. Blockchain for business applications invariably requires automation. Smart contracts are the key to making that automation flexible. scalable, and secure.
Ethereum replaces bitcoin’s more restrictive language (a scripting language of a hundred or so scripts) and replaces it with a language that allows developers to write their own programs. According to Ethereum’s Introduction to Smart Contracts: “A smart contract is simply a program that runs on the Ethereum blockchain. It’s a collection of code (its functions) and data (its state) that resides at a specific address on the Ethereum blockchain.”
Ethereum allows developers to program their own smart contracts, or ‘autonomous agents’, as the Ethereum Whitepaper calls them. The language is ‘Turing-complete’, meaning it supports a broader set of computational instructions. Smart contracts can:
- Function as ‘multi-signature’ accounts, so that funds are spent only when a required percentage of people agree
- Manage agreements between users, say, if one buys insurance from the other
- Provide utility to other contracts (like how a software library works)
- Store information about an application, such as domain registration information or membership records
Ethereum was the first cryptocurrency to launch smart contract functionality. As a result, it powers the lion’s share of applications. According to State of the dApps, about 80% of DeFi applications run on Ethereum’s network. Unfortunately, it has been a victim of its own success. The network is heavily congested, has a large carbon footprint, and developers complain of high gas (transaction) fees. It’s a bit like a big old expensive engine churning out fumes as it toils uphill. Ethereum also doesn’t work well with other blockchains.
With all the talk about Bitcoin, when looking at Ethereum performance, ETH has done better then BTC in 2021. We put together a sample of slides that looks at all time for both ETH and BTC. In addition, we compared ETH to other blockchain projects such as Polkadot (DOT), Chainlink (LINK), Solana (SOL), Binance Coin (BNB), and Cardano (ADA) with regard to a year timeframe. The data was gathered from CoinGecko.
Eth2, an upgrade to solve some of these issues is on the way, but it won’t be complete until at least 2022. “Eth2 refers to a set of interconnected upgrades that will make Ethereum more scalable, more secure, and more sustainable. These upgrades are being built by multiple teams from across the Ethereum ecosystem.”
Other Smart Contracts Projects
Besides Ethereum and the work that is being done on Eth2, there are other important projects that offer cryptocurrencies with Smart Contracts.
- Solana (SOL) – the fastest crypto on the block right now, with speeds of 50,000 transactions per second (TPS).
- Polkadot (DOT) – the use of parachains to connect blockchains.
- Kusama (KSM) – “Kusama is a scalable network of specialized blockchains built using Substrate and nearly the same codebase as Polkadot. The network is an experimental development environment for teams who want to move fast and innovate on Kusama or prepare for deployment on Polkadot.”
- Web3 Foundation – “Our passion is delivering Web 3.0, a decentralized and fair internet where users control their own data, identity and destiny.”
- Ergo Platform (ERG) – designed to process more complex contracts, which could appeal to the DeFi industry.
- Alogorand (ALGO) – aims to be simultaneously scalable, secure, and decentralized while using a consensus algorithm called pure proof-of-stake (PPoS).
- Central Bank Digital Currencies (CBDCs) – “Central banks and governments have been thrust into a new reality with new opportunities to foster economic growth and prosperity for their people, preserve monetary value, and maintain governance over their currency. Algorand is armed with technical proficiencies, thought leaders, and capabilities to help central banks around the world plan, test, and adopt blockchain in order to thrive and participate in a new digital economy.”
- Cardano (ADA) – “a proof-of-stake blockchain platform: the first to be founded on peer-reviewed research and developed through evidence-based methods. It combines pioneering technologies to provide unparalleled security and sustainability to decentralized applications, systems, and societies.”
- Cardano’s development road map is divided into five main stages:
- Goguen – smart contract functionality on the network via the Alonzo hard fork, completed in September 2021.
- Cardano Summit 2021 – major announcements:
A cryptocurrency is a digital or virtual currency that uses cryptography for security and cryptocurrency is difficult to counterfeit because of this security feature. Many cryptocurrencies are decentralized systems based on Blockchain Technology; a distributed ledger enforced by a disparate network of computers.
A defining feature of a cryptocurrency, and arguably its biggest allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. The first blockchain-based cryptocurrency was Bitcoin, which remains the most popular and most valuable. Today, there are thousands of alternate cryptocurrencies with various functions or specifications. Some of these are clones of Bitcoin while others are forks, or new cryptocurrencies that split off from an already existing one. (Investopedia)
Marriam-Webster defines cryptocurrency as any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.
Munehisa Homma – Candlesticks
Considered to be the “father” of price action trading and technical analysis. He was a Japanese rice trader that lived from 1724 to 1803. Homma is rumored to have made the equivalent of $10 billion in today’s dollars trading.
Homma realized price action reflects market psychology and critical to trading success that traders’ emotions have an important influence on market rice prices.
Munehisa Homma most famous book is ‘The Fountain of Gold – The Three Monkey Record of Money” that he wrote in 1755.
Candlesticks show that emotion by visually representing the size of price moves with different colors. Traders use the candlesticks to make trading decisions based on regularly occurring patterns that help forecast the short-term direction of the price.
Richard Demille Wyckoff (1873-1934) was an early 20th-century pioneer in the technical approach to studying the stock market.
Wyckoff developed a uniquely effective method to identify price targets for both long and short trades using Point and Figure (P&F) charts.
To understand the Wyckoff Method will need dedicated time to understand and it is beyond the scope to cover here due to details. In accordance, like understanding the Munehisa Homma and Candlesticks, it is highly recommended to comprehend before investing in the crypto market.
The Law Library Congress maintains a great site titled Regulation of Cryptocurrency Around the World. The report also titled Regulation of Cryptocurrency Around the World covers 130 countries as well as some regional organizations that have issued laws or policies on the subject. The past four years have seen cryptocurrencies become universal, prompting more national and regional authorities to grapple with their regulation. The expansive growth of cryptocurrencies makes it possible to identify emerging patterns.
A study by Blockchain Alliance, Enterprise Ethereum Alliance, Global Legal Group (glg), Wall Street Blockchain Alliance (WSBA), and Loan Syndications and Trading Association (LSTA) putout a comprehensive study titled Blockchain & Cryptocurrency Regulation 2021 with Josias Dewey as contributing editor covers critical issues facing practitioners and others involved in this area of technology and policy. Furthermore, the diversity of jurisdictions covered by this publication also provides a glimpse into how various governments have approached regulating this technology.
Cryptocurrency Markets & Exchanges
Currently there are over 9000 cryptocurrency coins being exchanged around the world on over 500 exchanges. There are several great sources that cover all the global cryptocurrency markets:
A list of most popular cryptocurrencies based on Market Capitalization are as follow:
Several cryptocurrency markets and exchanges are available to track ranking, pricing, volume, market capitalization, and circulating supply. A sample list includes the following:
Rickie Houston, a personal finance insider who writes about products, strategies, and tips to help you make smart decisions with your money put out a list of the best cryptocurrency exchanges for trading bitcoin and other assets which he looks at the top 6 best bitcoin/cryptocurrency exchanges 2021 and they are as follow:
- Coinbase – Coinbase Pro
- Binance US – process to approve account takes about a month
- Kraken – no Automated Clearing House (ACH) and high trading costs
Crypto.com – Crypto.com is on a blitzkrieg in advertising with utilizing celebrity influencer Matt Damon as the new face of company. According to company: “Crypto.com is the cryptocurrency and payment platform encompassing a range of products aimed at promoting the adoption of cryptocurrencies on a wider scale.”
At the moment, the platform offers MCO Visa cards, wallet and portfolio building services. Based on our testing the mobile application, be prepared for a higher spread on cryptocurrency from other exchanges such as Binance and Coinbase and after the 30-days free trading expires, be prepared for high trading fees with a complicated structure. In our experience, the mentioned rate was 2.9% after the 30-days expiration date.
The MCO Visa card is a prepaid card that may be used in conjunction with the Crypto.com app and the CRO (Crypto.com coin) system. Users can purchase cryptocurrency on the app and load it onto their card, which is then converted to fiat currency for usage in retailers.
The Automated Clearing House (ACH) listed must be initiated through your own bank which will cost you. Although, Crypto.com states no fees on ACH, do not pay the extra charge for same day transfer at your bank. Our experience was not fruitful, after three business days, funds bounced back to our account.
On low dollar cryptocurrency purchases and sells, maximum amounts are set for each on daily basis, especially if purchasing with credit or debit cards. Furthermore, when it is time to sell, you have set limits for low liquidity tokens that you can sell therefore, if you are attempting to sell off a cryptocurrency that is crashing, you have no way to stop the process.
Now the spread, at the time of writing, the price of Bitcoin on CoinGecko was $63,474.24 however, the price for Bitcoin on Crypto.com was $63,755.31. For Ethereum, the price on CoinGecko was $4,497.43 and the Crypto.com was 4,528.81. When trading, you must consider the additional spread that Crypto.com charges.
The best offering on Crypto.com is the DeFi Wallet which is a separate application that you can connect to your Crypto.com application. “Crypto.com DeFi Wallet is a user-custodied wallet where you are the custodian. This means you get full access and control of your crypto private keys. You have complete ownership of your crypto when they are stored in the Crypto.com Wallet, unlike a centralized custodian on the Crypto.com App.” In addition, you can deposit cryptocurrency and earn rewards which will require you to do some homework.
To conduct a crypto transaction, most people use crypto wallets installed on their mobile phones or computers. While such a method has its advantages, it is impractical in situations when you do not have access to your crypto wallet and the Internet. That is why many companies have proposed different solutions to bring more flexibility to crypto payments by using a crypto debit or credit card with earn crypto rewards programs. A sample of such companies are as follow:
Users can lose bitcoin and other cryptocurrency tokens because of theft, computer failure, loss of access keys, and more. Cold storage (or offline wallets) is one of the safest methods for holding bitcoin, as these wallets are not accessible via the Internet, but hot wallets are still convenient for some users. A sample of crypto wallets are as follow:
The real question you should be asking yourself is the type of features you want in a hot or cold wallet. Do you want a wallet that is attached to a crypto exchange, like Binance Chain Wallet? Or do you want a wallet best suited for mobile use, which is Mycelium?
It can be argued that the volatility early on brought about the interest and thus growth with the cryptocurrency market. A post by MIT Technology Review titled One Bitcoin “whale” may have fueled the currency’s price spike in 2017, shared that a single Bitcoin holder called a “whale” in cryptocurrency parlance likely manipulated the market and helped fuel the big rise in Bitcoin’s price in 2017, according to MIT researchers. That year, Bitcoin’s price jumped from under $1,000 in January to more than $19,000 in December.
In 2018, University of Texas professor John Griffin and Amin Shams, an instructor at Ohio State University, published controversial research concluding that in 2017 just a few big players used the stable coin Tether to prop up the price of Bitcoin following market downturns. Griffin and Shams studied Bitcoin and Tether transactions from March 1, 2017, to March 31, 2018. They found that Bitcoin purchases on Bitfinex increased whenever the price dropped by certain increments.
The same executives who own Bitfinex also control Tether, which is no stranger to controversy. In 2017, the two firms received subpoenas from the US Commodity Futures Trading Commission. In May of 2018, the US Justice Department opened a criminal investigation into whether Tether was indeed being used to manipulate Bitcoin. And the New York attorney general has sued Tether and Bitfinex, accusing them of participating in a cover-up after losing $850 million worth of customer and corporate funds.
The logic behind Tether was to create a stable cryptocurrency that can be used like digital dollars however, according to their site, Tether converts cash into digital currency, to anchor or “tether” the value of the coin to the price of national currencies like the US dollar, the Euro, and the Yen. Like other cryptos it uses blockchain.
The Wall Street Journal (WSJ, 11/4/2019) posted another interesting article on Tether titled Tether’s $5 Billion Error Exposes Crypto Market’s Fragility, sudden flood of digital coins spooked market and drove down price of bitcoin by about 12%. WSJ stated that the company behind Tether mistakenly created more than $5 billion of the digital coins in an instant more than doubling the amount in circulation. The sudden flood spooked the market and drove down the price of bitcoin, the most actively traded cryptocurrency, by about 12%.
Investopedia posted The Future Of Cryptocurrency in 2019 and Beyond, which stated that the future outlook for bitcoin is the subject of much debate. While the financial media is proliferated by so-called crypto-evangelists, Harvard University Professor of Economics and Public Policy Kenneth Rogoff suggests that the “overwhelming sentiment” among crypto advocates is that the total “market capitalization of cryptocurrencies could explode over the next five years, rising to $5-10 [trillion].”
The historic volatility of the asset class is “no reason to panic,” he says. Still, he tempered his optimism and that of the “crypto evangelist” view of Bitcoin as digital gold, calling it “nutty,” stating its long-term value is “more likely to be $100 than $100,000.” Rogoff argues that unlike physical gold, Bitcoin’s use is limited to transactions, which makes it more vulnerable to a bubble-like collapse. Additionally, the cryptocurrency’s energy-intensive verification process is “vastly less efficient” than systems that rely on “a trusted central authority like a central bank.”
CoinDesk posted a insightful blog by Leigh Cuen titled MIT-IBM AI Lab Analyzed 200,000 Bitcoin Transactions. Only 2% Were Labeled ‘Illicit’. Blockchain analytics firm Elliptic collaborated with researchers from the Massachusetts Institute of Technology (MIT) and IBM to publish a public dataset of bitcoin transactions associated with illicit activity.
The group’s study detailed how researchers at the MIT-IBM Watson AI Lab used machine learning software to analyze 203,769 bitcoin node transactions worth roughly $6 billion in total.
The research explored whether artificial intelligence could assist current Anti-Money Laundering (AML) procedures. Only 2 percent of the 200,000 bitcoin transactions in the data set were deemed illicit as part of Eliptic’s initial work. While 21 percent were identified as lawful, most of the transactions, roughly 77 percent, remained unclassified. (To date, there have been an estimated 440 million bitcoin transactions since the network’s launch in 2009.)
On this page, we have covered a great deal of material in relation to blockchain and cryptocurrency and we barely touched the surface. The blockchain and cryptocurrency technology sectors have accomplished a great deal over the last decade with many challenges to yet be figured. At RREVENU, we foresee tremendous opportunities about the future of blockchain and all the opportunities that this technology will present for the years to come.
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