If I told you that something that was previously 1 cent is now worth over $20,000, I am sure you would be fixated with the price -- and for good reason, you should be. However, focusing on price is a sure way to miss out on the true value of an asset.
Bitcoin could have turned a simple $10 investment in 2008 to over $20 million in 2020. This meteoric rise has caught the attention of many. Yet, if asked what Bitcoin or blockchain is for that matter, most would not be able to explain.
Blockchain is often referred to as being Internet 3.0. Let's take a quick look at what that means.
In the early stages of the Internet, read-only was the only way to interact with the web. Today, we can become more intuitive with the web through advanced functionalities. Information was placed on the web and, through search, consumers could read that information.
Think of YouTube, Instagram, or the formerly popular Myspace. These platforms allow individuals to create engaging content (such as music, educational videos, advertising, etc.) and interact directly with consumers.
This is where blockchain technology comes in to play. Internet 3.0 allows for complex applications to be built on top of the Internet, where smart contracts follow specific commands that cannot be changed. Without the need for centralized authorities, Bitcoin became the first manifestation of an application being built on the blockchain. Throughout the years, thousands of projects have been built. Digital currencies are just one aspect of this technology. In the future, we will have records on the blockchain that will verify the birth and death of every human on the planet. This will, for example, be able to prevent voter fraud by blocking votes from those who have been deceased for years, yet their names were found at voting polls. Blockchain will solve that problem.
Other problems Blockchain can solve:
Cross-Border Payments: Fees and middlemen create a lot friction with cross-border payments. Cryptocurrencies can seamlessly be sent to anyone around the world who has a wallet address. Users can make transactions without permission from the government and banking institutions.
Supply Chain: Fraud continues to run rampant with goods and services online. How do we know that what we are ordering online is legit? Blockchain will create a data sharing and transparency system that tracks and holds accountable every party involved.
Contracts: Honoring agreements, for the most part, is secure for the upper class. But what about everyone else? Blockchain's smart contracts can be created for everyday use, which can eliminate small claims in court and overpriced lawyers charging a fee for a simple contract made between you and another person. In some countries, corrupt leaders strip land from birthright owners, imposing unregulated financial burdens on its citizens. Blockchain can assist with assigning the appropriate rights to people, along with reducing fraud at the national level.
These are just a few of many benefits that blockchain offers to the world. New investors often rush into the market because of attractive prices. However, focusing on price should be the last metric in your decision making. Blockchain is an emerging technology that will reshape the world. The true value cannot be measured.
If you're interested in learning more, click here for our Blockchain Secrets course.