Type “bitcoin” into Google’s search engine and it will spit out 326 million results in under a second. By comparison, “Jesus” returns just over twice as many hits (769m), while “gold” boasts 10 times as much as bitcoin (3.4 billion) – for the moment, at least.
~ Risk warning: Cryptocurrencies can fluctuate widely in prices and are therefore not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Trading history presented is less than 5 years and may not suffice as basis for investment decision. Your capital is at risk. ~
The author (or authors) proposed “a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution”. In October 2008, only weeks after the collapse of Lehman Brothers, then the fourth largest investment bank in America, Satoshi Nakamoto – the mysterious and still-masked figurehead of the Bitcoin movement – published the famous white paper, Bitcoin: A peer-to-peer electronic cash system.
It may seem a bit of fun, but Google’s search results indicate where the original cryptocurrency ranks right now, in September 2018, in terms of popularity on the internet, accessed by around four billion people – over half of the humans on the planet. And considering bitcoin was launched less than 10 years ago, in January 2009, it may not be long before “digital gold” supersedes the physical version, in both Google’s search rankings and reality. Its influence can already be seen everywhere.
The white paper states: “No mechanism exists to make payments over a communications channel without a trusted party. What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.
“Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.”
Bitcoin and more advanced cryptos have solved numerous problems outlined by Mr Nakamoto, leading many commentators to posit that this form of digital currency represents the future of money. With an inbuilt safeguard against fraud and false identity – thanks to the blockchain technology – greater transparency, plus lower fees for cross-country transactions, and by being free from government interference, cryptoassets have begun transforming payment systems around the world.
Despite being almost a decade old, bitcoin remains the world’s dominant crypto. It is now accepted by a vast variety of organisations in a wide range of industries – such as Microsoft, Expedia, bloomberg.com, Save the Children, Wikipedia, Virgin Galactic, Subway, and Whole Foods.
And even though the cryptoasset craze spawned by bitcoin – there are now thousands of cryptocurrencies, as well as a quickly growing number of offshoots (security tokens, utility tokens, platform tokens, and brand tokens) – is in its relative infancy, it has developed at an exponential rate.
Numerous experts predict that blockchain technology – a secure, decentralised, distributed digital public ledger, which underpins bitcoin and countless other cryptoassets – will become as revolutionary, transformative and important in our daily lives as the internet is today.
In this digital epoch, where nascent technologies are converging in a thrilling way, bitcoin – and the incredible spirit of innovation it has generated – stands out as the global game-changing technology at its heart. Indeed, it is hard to list all the ways in which it has altered our lives, for the better.
Futurist and entrepreneur Nell Watson, a member of the Artificial Intelligence & Robotics Faculty at Singularity University in California, offers this illustrative fact about the potency of bitcoin. “The most powerful supercomputer on the planet is not owned by the Russians, or the Chinese, Americans, or even the Europeans,” she starts. “It’s owned by all of us; there is more computational power in the bitcoin hashing network than the top 500 supercomputers on this planet combined, times one thousand. That is a vast pool of computation.”
Ms Nell continues: “This network uses about 1 per cent of all electricity generated on the planet today. It uses as much electricity as entire nations, such as Austria.” Now that is power.
With bitcoin’s 10-year anniversary approaching, it is interesting and timely to compare and contrast the speed with which other world-enhancing and disruptive technologies took to take off.
SMARTPHONES – QUICKER THAN BITCOIN?
The Apple iPhone, launched in the summer of 2007, triggered the mass explosion of smartphone adoption. In 2019 the number of mobile phone users is forecast to reach 4.68bn. While that uptake has been alarmingly quick, it could be argued that the first smartphone was introduced in the mid 1990s. BellSouth’s Simon Personal Communicator – which offered a touchscreen and could send and receive faxes and emails – was marketed to consumers in 1994 and began life as a prototype called “Angler”, having been developed by IBM’s Frank Canova in 1992.
ELECTRONIC MAIL – SLOWER THAN BITCOIN
Much in the same way bitcoin (and therefore cryptoassets) is the first use case of blockchain technology, electronic mail, or email as we know it, was the primary use case of the internet. The email – essentially transferring messages between two electronic devices – can be traced back to the 1960s, and was invented by American computer programmer Ray Tomlinson. The world’s first user-friendly email platform, Hotmail, was introduced in 1996, and one study predicts that before the start of 2019 there will be 3.8bn email users, some 100m than 12 months earlier.
THE STEAM ENGINE – CHUGGED ALONG SLOWER THAN BITCOIN
The stationary steam engine, as patented by Scottish engineer James Watt in 1781, produced continuous rotary motion that enabled a wide range of manufacturing machinery to be powered. It was a key component and symbol of the Industrial Revolution, which stretched from around the 1760s through to the 1840s. Not only did it disrupt factories across the world, the steam engine transformed transport. The Middleton Railway was the first to use steam locomotives in 1812, though the steam engine ran out of puff when electricity began to spark new ideas.
ELECTRIC POWER – MUCH SLOWER THAN BITCOIN
Without electricity modern life would be nigh on impossible. Alessandro Volta is hailed as the godfather of electricity (hence the derived unit of electric potential, volts, and voltage), having developed the voltaic pile, which produced electricity through a chemical reaction, in 1800. Thirty-one years later Michael Faraday introduced a machine that generated electricity, this time from rotary motion. However, it took almost half a century longer for the tech to be developed to the point of being commercially viable. It wasn’t until 1878 when Thomas Edison had a light-bulb moment and famously offered an alternative to gas lighting and heating, by using direct current electricity.
THE HELICOPTER – CENTURIES SLOWER THAN BITCOIN
In 2018, helicopters are the symbol of wealth, as well as vital aircraft for the emergency services and the military. The helicopter industry took off in the 1930s, between the two World Wars. Heinrich Focke of Focke-Wulf produced the Cierva C.30 autogyro in 1933, and designed the world’s first practical transverse twin-rotor helicopter, the Focke-Wulf Fw 61, which first took to the skies in June 1936. During World War II the Germans employed helicopters for reconnaissance, medical, and transport missions. With the advent of the turbine age, in the 1950s, helicopters further developed. The concept, though, is believed to have first been put on paper all the way back in the 1480s, when Renaissance polymath Leonardo da Vinci, of Mona Lisa fame, sketched an “aerial screw”.
THE TELEGRAPH – DECADES SLOWER THAN BITCOIN
Telegraphy – the long-distance transmission of symbolic or textual messages without using a physical object (such as a pigeon, for example) as a conduit – derives from the Greek for “at a distance” and “to write”. It was revolutionary in the 1800s, and yet (like bitcoin) it had many detractors at the beginning of its evolution. Consider that before telegraphy was used, it would take 73 days for a letter to reach Sydney from London. Just as bitcoin requires cryptography to work, telegraphy relies on both the sender and receiver of a message having the method of encoding and decoding it – hence why it was met with cynicism initially. Without it, though, we would not have other game-changing technologies, such as facsimile, wireless telegraphy, the internet, and email.
GLOBAL POSITIONING SYSTEM – PEOPLE GRAVITATED TO IT SLOWER THAN TO BITCOIN
Smartphone users around the world have become dependant upon GPS, or Global Positioning System, to give it the full name. The satellite-based radionavigation system is necessary for thousands of applications to work properly on our devices, and we would be lost without it, literally. It may be an essential tool for navigation in 2018, but it has taken a surprising length of time for it to become a transformative technology. That is mostly because the United States government – whose military first launched a GPS satellite into orbit over 40 years ago, in February 1978 – kept it under wraps for many years. President Ronald Reagan opened the GPS system to the public in September 1983, after realising it would be of universal use, though there was a catch with the free-to-use system: civilians were granted an accuracy of about 100 metres, thus ensuring only the US military had the best available data. It has become more accurate for us all since. Now over 30 GPS satellites currently orbit the earth helping to guide our way and track our locations and movements.
Cryptocurrencies can fluctuate widely in prices and are therefore not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Trading history presented is less than 5 years and may not suffice as basis for investment decision. Your capital is at risk.