Cryptocurrency such as Bitcoin has been increasingly gaining the attention of the mainstream consumers. Initially, public perception of the novel instrument was that it was a risky financial fad. However, Bitcoin and the architecture that makes it possible, the blockchain, are growing more familiar among global consumers.
One reason that Bitcoin and its underlying technology are garnering so much attention is that the financial instrument is proving that its supporting architecture is virtually impenetrable.
In addition, the currency can potentially provide banking access to an untapped market of 2.2 billion citizens, a possibility of great interest to investors. As an example, the M-PESA smartphone app, a Vodafone subsidiary, has claimed its share of the $100 billion per day mobile transaction market by providing financial access to nearly 30 million Kenyan consumers previously disenfranchised from making convenient financial exchanges, and one in three M-PESA users own a bitcoin wallet.
Bitcoin works by using a global, decentralized network of volunteer computers to process the blockchain algorithms that validate transactions. Decentralization works in the same fashion as the once popular peer-to-peer file sharing service Napster.
In other words, the sum of the entire network manages Bitcoin accounting, versus traditional management protocols that operate from a single location. Another benefit of this collaboration is that the technology is Internet-based and not easily bound by government regulation, making the exchange of funds across international borders fast and easy.
A Growing Influence on Financial Markets
While many consumers have heard of Bitcoin, they may not understand how the innovative financial instrument works. Despite this, the digital currency continues to gain traction with consumers, businesses and even governments are looking into cryptocurrency as a viable alternative to traditional financial instruments.
In fact, governments and large corporations are investing significantly in researching how to take advantage of Bitcoin and blockchain technologies. The technologies are of more immediate importance to small- to mid-sized businesses that view Bitcoin as a potentially secure and cost-effective way to conduct daily financial transactions.
Tapping Into the Power of Big Data Analytics
The bitcoin blockchain appeals to a wide array of users because the architecture provides anonymity by offering transaction recipients only limited data, such as wallet information and fund amounts. The data generated by bitcoin transactions are on the rise, with successful exchanges reaching around a half a million interactions on day one during 2017.
Cryptocurrency values update in real-time, as investors make their transactions, causing bitcoin rates to fluctuate wildly. While the concept of using big data technology to analyze market trends has yet to firmly take root among investors, the group could benefit greatly from the marriage.
Current bitcoin speculators have already accepted that the financial vehicle is a high-risk investment. However, investors would greatly value a tool that can take the guesswork out of making a profit with the medium. Big data is an ideal resource for sorting through the volumes structured and unstructured cryptocurrency data. With the right programming, the technology may one day offer a solution for analyzing finicky bitcoin fluctuations.
Merging Innovations to Help Society
The merger of Bitcoin and big data technologies may offer utility in the social work field. Social impact bonds, also called pay-for-success (PFS) contracts are transforming counselling service outcomes. The investment model is gaining support among private investors and institutions that deliver counselling services. The successful outcome of PFS funded initiatives relies greatly on the efficiency of care provider operations. Big data may one day help PFS investors evaluate past and future PFS backed projects to enhance their profits.
Blockchain technology is the foundation of Bitcoin and other cryptocurrencies. In the most basic sense, the algorithm reconciles a peer-to-peer hosted ledger of all bitcoin transactions and validations. Individual cryptocurrency owners hold parts of blockchain data in their wallets, and the stored information overrules any attempt to defraud the system.
Today, blockchain is used primarily for cryptocurrency transactions. The future, however, may consist of a world where businesses, municipalities and the federal governments use the technology to record important information, such as real property transfers, which would eliminate the paperwork and expenses associated with today’s real estate recordkeeping practices.
Built on the accuracy and strength of blockchain technology, Bitcoin has emerged as a major influence in financial and investment markets. Blockchain is secure in theory. However, cyberattackers have found a way to defeat the technology.
A relatively recent large-scale cryptocurrency theft has left analysts wondering if the technology is secure enough to rely on for important transactions needed to conduct business. Additionally, after the precedent set by the former file-sharing giant Napster, peer-to-peer technologies automatically raise questions about the potential for piracy.
Despite these concerns, blockchain, Bitcoin and cryptocurrencies hold great potential for the future. The technologies are, after all, in their infancy. As the battle between cryptocurrency technology developers and cyberattackers unfolds, consumers, businesses and governments will have to wait to see if Bitcoin and other blockchain-based resources make the grade as a secure way to record and track the world’s most important transactions.