Don't confuse Bitcoin and the Blockchain

People are betting on the future of Blockchain, unfortunately many are being duped to believe that Bitcoin fairly represents the potential of the Blockchain - it does not. It is important to know the difference, if you own Bitcoins, you may want to learn before they drop in value.

A blockchain – originally block chain – is a continuously growing list of records, called blocks, which are linked and secured using cryptography an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. As a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority. Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance.

Bitcoin is a cryptocurrency and payment system. It was the first decentralized digital currency – the system works without a central repository or single administrator.The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. 

(on a side note: I was invited to mine bitcoins in 2009 but did not clearly understand the Blockchain at the time and felt the 4 or 5 coins a day I would earn for making my servers available was not worth the risk. (don’t worry I have made a lot of mistakes like this) I certainly don’t have any sour grapes over missing this opportunity.)

I am a huge fan of Blockchain and technology in general. I believe blockchain is going to dramatically improve the world and someday, when an appropriate digital currency is introduced, dramatically reduce much of the fraud that exists in the world today and go a long way to further reduce the burdensome cost of intermediation imposed by the banks

I do not believe that Bitcoin has any chance of being the digital currency of the future.

Bitcoin has several shortcomings, not the least of which is its volatility. Business can no more operate with a volatile currency than anyone else. You cannot get employees to come to work in anticipation of being paid $1000 for the week then have their pay equal $500 or $1400, any more than you can get a supplier to agree to contract products or services with an undefined value. 

A digital currency will be created based on Blockchain technology, it will be (hopefully) global, hopefully utilized by all governments and available to all 7.5 billion people and it will be stable.

Picture Bitcoins volatility problem: Imagine you took a job on September 1st 2017when bitcoin was $4,900 expecting to get $4,900 in currency for 2 weeks worth of work. Then on September 14th 2017, your payday, the currency is worth $3,200, you would have been better off being paid in Venezuelan Bolivars.

As of today the world wide value of Bitcoin is worth roughly the amount of sales of iPhones for 2017. Not the amount of iPhones sold since they were invented, just those sold in 2017. The world would no more miss the disappearance of Bitcoin than it would the disappearance of the iPhone. We know that iPhones will soon be replaced with a more advanced technology, you should also accept that your bitcoins will, likewise be replaced with something better and certainly more stable. Blockchain(s) will be and are ubiquitous in our world today, soon a blockchain based digital currency will be introduced as a stable and universally accepted payment method, we look forward to that day!