Crypto, cryptocurrency, blockchain, bitcoin. All terms that you may have heard recently but you’re not quite sure what the hype is all about. Maybe you heard about Boston based company Poloniex getting bought out by Circle for 400 million. Or maybe you heard of the San Francisco based fintech company Coinbase being valued as high as 8 billion and even though it has only been around for a few years. Maybe you even heard the whispers on the streets of Boston about Fidelity building a cryptocurrency exchange. Or maybe you have a friend that bought Bitcoin in 2010 and is now living in a penthouse in the Back Bay and driving a Bentley. The numbers are staggering, the wealth that is being created is ridiculous, and the technology is changing the world. Cryptocurrency is changing how we conduct business all over the world. Using digital wallets, consumers are now able to send money all over the world in seconds, many times without a fee. Companies like Starbucks, Microsoft, Expedia, Overstock and other big-name brands are either accepting cryptocurrency or finding ways to make it easier for consumers to exchange their crypto for their goods or services.
There are many reasons why but the most basic answer is simple. When Bitcoin was created in late 2008 or early 2009, the world economy was in a very bad place. Big banks, big financial institutions and world governments were looking the other way while companies passed toxic assets back and forth, and making money at the expense of average everyday people. Bitcoin was a response to this catastrophe that destroyed families and lives. Bitcoin, is a trustless, peer to peer, decentralized currency that does not rely on centralized organizations or governments. It is a system by which individuals decide what to send, how to send it, and where to send it without any centralized organizations controlling your money and with all of it recorded on a distributed ledger called the blockchain. Now I’m oversimplifying it here, and there are instances where centralization has creeped into the world of crypto. But, for all intents and purposes this is what Bitcoin is, and it was the first cryptocurrency.
Since the creation of Bitcoin almost 2000 new cryptocurrencies now exist. Many have seized the opportunity to capitalize on this new emerging technology. It is really very similar to the creation of the internet, when websites were this abstract “thing” that existed on the World Wide Web. Cryptocurrencies are a hard to conceptualize evolution of currency and commerce. The underlying technology of blockchain is what most of the world is really benefiting from. Blockchain is also very simple and its genius is in fact in its simplicity. Blockchain technology stores data in blocks, that is then distributed to multiple “nodes” or computers, that verify transactions on the blockchain. Each time a transaction happens it is recorded on the blockchain and eventually a new block is created. All of this is done with software and outside of human interference. Again, I am somewhat oversimplifying here but this is essentially how it works.
Blockchain is being used to revolutionize industries from finance to medical to supply chains. For instance, in an effort to improve food safety, Walmart teamed up with IBM to create its own blockchain to track the food it sells to consumers. Already in use, the Walmart blockchain can identify and track where food is in minutes, when it used to take days. This type of use is not only making companies more efficient but also saving lives. Regardless of what industry you are in, blockchain and cryptocurrency could not only disrupt your business but make it better. If I were to give anyone advice about what to do or how to get involved with cryptocurrency or blockchain, it would be simple. Pay attention!
A graduate of Suffolk Law School, Michael Alden is a 3x Wall Street Journal and USA Today Best Seller. His latest book Crushing Crypto, How anyone can build a fortune in Cryptocurrency can be found on his website. You can also find him on Facebook, Twitter, Instagram and Snapchat @MikeAlden2012