Paulelmo's Blog

Early thoughts on bitcoin and blockchain technology

You’ve heard about bitcoin, but have you heard about blockchain technology? Having taken an interest in these concerns, inspired by my financial technology writing for Lending Times, it seems to me that blockchain, the technology that makes bitcoin possible, might be the real story.

I’m just beginning in my studies of this technology, so I’m not going to be writing anything groundbreaking here, but this is all information I didn’t have before I started writing for LT, so I figure it’s information a lot of you don’t have as well.

I feel more confident about the future knowing the little I do about the blockchain, which makes me think it’s worthwhile to share it with you.

The blockchain is a distributed ledger. What that means is this: if you download the code to join the chain, you are privy to every transaction in the history of the chain.

The difference between bitcoin and a bank is that there is no central governing construct with the blockchain. The software itself serves as that central construct, and every investor,  being so invested, has as much control, and is privy to just as much information, as any other. So, you don’t go to the bank; rather, you become the bank.

I believe that this, plus the savings so associated with greatly lessened transaction costs, will become especially attractive to us–those with the ability to share these words basically–but think about what it would mean to you if you didn’t have access to a bank? An estimated two billion people in the world don’t have access to a bank. What would you think the technology that provides that would be worth? What if we took a good portion of those two billion people and gave them the technology to join in a global economy that has to this point passed them by.

That’s why I think this technology is worth studying. It’s also why I think that, if you have a bit of disposable investment income that you don’t mind risking, it’s silly to not be putting some into bitcoin right now. Yes, there are entirely too many possibilities that exist with the technology to bet the farm, but if you do have a bit you don’t mind putting to some risk, the payoff might prove worth it.

And I’m interested in all of this. Because of that, I’d love to hear any thoughts or experiences you have. Have you bought bitcoin? Do you have any insights into blockchain technology that might help me understand things better? I’m hoping to find out some of what people are thinking about these things. Hope you can help.

Thanks and love.

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