You’ve probably heard of Bitcoin, a form of cryptocurrency that’s in high demand and expected to continue growing in popularity. In a previous article, we covered the basics of Bitcoin, and the new tax laws that may affect investors. However, you may not be familiar with the concept of blockchain, which is the technology that Bitcoin uses to operate. Here, we cover the details on this exciting new method of digital record keeping.
Cryptocurrency is poised to become the way of the future. Forms of digital currency, such as Bitcoin, are based upon blockchain technology. The concept of blockchain is relatively simple—online transactions are linked together in a de-centralized cohesive chain, so the information is accurate and readily available. According to MIT Sloan Assistant Professor Christian Catalini, blockchain technology “…can contain different types of shared data, such as transaction records, attributes of transactions, credentials, or other pieces of information. The ledger is often secured through a clever mix of cryptography and game theory, and does not require trusted nodes like traditional networks.”
Sound confusing? If so, think of it this way: blockchain technology makes it possible for communities to authenticate information without going through a potentially untrustworthy third-party. As long as an individual has Internet access, it’s possible to use the peer-to-peer digital record-keeping system. The most exciting aspects about blockchain include its versatility, and its potential to revolutionize virtually every industry and facet of life. It’s not just Bitcoin that utilizes blockchain technology, however. This cutting edge concept is expected to make its way toward re-shaping the global economy.
What Could Blockchain Be Used For In The Future?
Cryptocurrency is on the rise, but there are many more uses of blockchain technology to explore. With further development, it could become possible for most of the world to communicate and make transactions securely and seamlessly. The options are boundless—this technology could change the nature of the real estate market, significantly reduce the prevalence of money laundering, and even improve human rights around the globe.
In the case of real estate, property records could be securely stored on a blockchain server, eliminating the need for costly admin duties. By using blockchain instead of checking the records manually, buyers could potentially save quite a bit on closing costs like title insurance premiums. In some areas of the country, the future is already here—some landlords are beginning to use blockchain technology for collecting rent payment. If this trend takes off, it could be simpler and more transparent than ever to make everyday transactions.
We’ve seen how quickly cryptocurrency has taken off, and that’s just one practical use of blockchain technology. While nothing is certain, it’s highly probable that this emerging digital system will have major implications on the world economy.
By Jennifer Egbert, RE/MAX Alliance Downtown in Boulder. Jennifer is a Realtor at RE/MAX Alliance Downtown in Boulder and specializes in luxury neighborhoods, home builders and current market conditions. To learn more about the Boulder real estate market, visit jenniferegbert.com, e-mail firstname.lastname@example.org or call 303.619.3373.