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Cryptocurrency & Blockchain: Ether Said than Done

By January 16, 2018Security

Since I realized I had an entire blog post’s worth of somewhat coherent sentences in my Sent Items, I figured I may as well share since it was already done 🙂

Recently, I got an email from my esteemed boss with the following subject line:

“Crypto Currency – block chain, etc.”

(yeah I know it’s “cryptocurrency” but that’s what it said so…)

The email contained only a single question:

“Any background or how it will disrupt/change the financial and other industries?”

Resisting the urge to simply reply “yes”, I wrote a sentence:

“That is the $64 (or 0.01 Bitcoin) question!”

See, it’s funny because $64 is 0.01 Bitcoin. True story.

Pleased with how adroitly I found and mastered the Google Bitcoin conversion calculator, I wrote another sentence. Then another. And another. Here they all are (in order of appearance):

There is no shortage of speculation right now. New cryptocurrency players of popping up and mainstream institutions are just now starting to see this as more than a passing fad. The elephant in the room with cryptocurrency is something rarely discussed: Despite its sexy “non-physical” nature, every bit of it (pun intended) is stored on a physical device somewhere and every single one of those devices is fully dependent on a massive infrastructure to function. Unlike traditional (aka “actual”) money, that can exist in both digital and physical forms (including as paper currency), and regardless of the form, be used to buy everything from a gallon of milk to a mansion full of gallons of milk, cryptocurrency cannot leave the ethereal realm.

So the real risk of disruption to the financial industry would be this: That one day a significant number of banks or other financial institutions were using it.

No Electrons Flowing
=

No Commerce Takes Place.

Think about that. What if every Bit-O-Money you possessed was electronic? It would super easy to transfer funds, that’s for sure. But one decently widespread power event could prevent, not just you, but the entire affected area from conducting any trade whatsoever. Like none. Since there’s no paper cash, even your friendly neighborhood crack dealer would be unable to do business because nobody has any cash, their phone batteries have all gone dead, and drug dealers don’t exactly extend credit based on double-pinky swears to pay them later (one assumes).

The blockchain element is something that might change the way businesses view this type of thing. It adds a layer of accountability (the bookkeeping kind, not the blame kind) and the digital equivalent of a “paper trail”. It is supposed to be immutable. But it’s digital, so it’s automatically vulnerable given enough time and the ingenuity of whomever wants to mess with it.

Here’s a really good infographic on the whole idea. I wish I had a 36″ wide printer so I could put this up on as a poster on my wall 🙂

Mike

…and that was my email. Pretty emaily I guess.

Until next time,

Mike (again)

 


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