The widespread adoption of blockchain technology could be good news for the internet and its users
One would need to have the attention span of a newt to be surprised by what has happened – and is still happening – with bitcoin, the so-called cryptocurrency. Non-newts are immediately reminded of the tulip mania that swept the Netherlands in the 1630s. At the peak of that bubble, in February 1637, a single bulb was selling for 10 times the average annual income of a skilled craftsworker. Robert Shiller, a Nobel laureate in economics speaking at Davos, brought up the Dutch bubble when asked about bitcoin. The tulip analogy holds, he said, but: “The question is: did that collapse? We still pay for tulips even now and sometimes they get expensive. Bitcoin might totally collapse and be forgotten, and I think that’s a good likely outcome, but it could linger on for a good long time; it could be here in 100 years.”
The downside of the media feeding frenzy around bitcoin is the way it obscures the fact that the technology underpinning it, the blockchain, or the public distributed ledger – a database securely recording financial, physical or electronic assets for sharing across a network through transparent updates of information – is potentially very important. This is because it may have more useful applications than supporting speculative bubbles or money laundering. In 2016, for example, Mark Walport, the government’s chief scientific adviser issued a report, arguing that the technology “could transform the delivery of public services and boost productivity”.
Development of the protocols for a global network is a critical responsibility, yet it’s being carried out by volunteers
An initial coin offering (ICO) is when a new cryptocurrency company offers a portion of its tokens for sale all at once to jumpstart trading, raise funds for continued development and earn a return on investment for its founders.