What’s the Relationship Between Blockchain and Cryptocurrencies?
By now, if you haven’t heard the terms “blockchain” and “cryptocurrency,” you’ve probably been living under a rock. But surprisingly, blockchain technology is not as new as the hype may lead us to believe. Blockchain’s roots go much deeper. In fact, today’s blockchain technology is built upon the principles of cryptography and digital signatures that have been around for decades. Cryptography itself has been around since the time of the Spartans, if not long before. Digital signature technology came about in 1976.
Thus, blockchain should not be considered new technology, per se. Rather, the blockchain is simply the next evolutionary step in digital signature technology that uses decentralized networks to solve what some consider to be rather large flaws in how we handle data and security.
A Quick History of Blockchain Tech
Before the first utterances of Bitcoin by the infamous Satoshi Nakamoto were ever a thing, there were already numerous projects around the world focused on ways to securely store data as “blocks” in a “chain” of custody, proven by digital signatures. For example, the nation of Estonia was the first country to adopt blockchain at the governmental level in 2008, the same year Satoshi minted the Bitcoin genesis block.
In fact, there have been a few theories that Satoshi may have been an Estonian citizen. Today, Estonian citizens enjoy utilizing many government services online, including voting in elections, without fear of having their identities compromised, thanks to the advancements that the blockchain brings.
Could Cryptocurrencies Exist Without Blockchain?
Yes. In fact, one very controversial cryptocurrency, IOTA, was built without a blockchain in 2016. Instead of using a blockchain, IOTA created a technology they dubbed a “tangle” wherein as more transactions are added to the network, the overall speed and efficiency of the system becomes faster and more efficient.
However, the tangle proved to be quite vulnerable to hacking. After some difficult trials and tribulations, IOTA rebuilt its technology from the ground up and launched a new version in the spring of 2021.
As is the case with many forms of technology, the blockchain will likely soon give way to a new evolution of web decentralization. For example, the creator of the World Wide Web, Sir Tim Berners-Lee, is currently working on a project called Solid. While Solid features many of the same features as blockchain, it is not run on a decentralized network. Rather, Solid’s web platform allows users to control their own data and choose who can access said data.
Whether or not Solid proves to be as successful as blockchain remains to be seen. But there is no denying that blockchain technology will continue to evolve along with the rest of the technological landscape. In fact, that evolution may accelerate exponentially as Solid works to integrate interoperability with numerous blockchain projects.
Do All Cryptos Run on a Form of Blockchain?
Currently, all cryptocurrencies are on one form of blockchain or another. However, this will likely not be the case for long as it becomes increasingly easier to integrate other forms of decentralized networks with different cryptos.
Some cryptocurrencies are currently built on top of Ethereum’s blockchain, while others exist entirely independent of any platform or protocol. The integration of other decentralization strategies into existing cryptos will likely become more common in the years ahead.
Is Blockchain Useful for Applications Other Than Crypto?
Yes. Blockchain technology has already proven useful for applications outside of the financial sector and it will continue to be used in a variety of different ways as decentralized networks gain more widespread adoption.
Here are just some examples:
- Peer-to-peer marketplaces – Decentralized marketplaces like OpenBazaar feature transparent, peer-reviewed listings that are resistant to censorship.
- Social media platforms – Steemit’s blockchain-based system rewards users for submitting content while also filtering spam and abusive content, all of which is tracked via IPFS technology.
- Insurance companies – AXA Strategic Ventures recently launched a $150M fund focused on investing in blockchain startups working within the insurance industry.
- Voting systems – Follow My Vote’s blockchain-based voting platform provides superior security, transparency, and usability for election officials.
- Property ownership – Estonia has already started using blockchain to maintain public records of property ownership in order to reduce fraud within the system.
- Medical record storage – Medicalchain’s telemedicine application secures electronic health records and notarizes documents on the blockchain to ensure authenticity.
What Is The Future of Blockchain?
Blockchain technology is experiencing a surge in popularity as more companies begin utilizing decentralized networks for their transactions, data storage needs, and other applications. As technology advances in other areas of science, we may one day see the descendants of blockchain in areas many never thought possible.
Our current methods for producing digital information are quickly outpacing our capacity to store it. It is estimated that the world produces 463 exabytes of data per day. That equals more than 1,000,000,000,000,000,000 (1 quintillion) bytes or, to put it in terms of size, fills about 2,000 cabinets in a 4-story data center the size of a city block. PER DAY.
We’re already researching new ways to store all of this information. For example, scientists are perfecting ways to store digital information within strands of synthetic DNA. Microsoft – among others – is already working on ways to automate the process of encoding and decoding digital DNA. There is a very strong possibility that in just a few short years, we may see these and other technologies combine to create the perfect solution for storing digital information.