We all remember the excitement of last December when the price of Bitcoin, the most famous of cryptocurrencies, rose to $ 19,000 from just $ 3,000 three months earlier. This made many wealthy lucky people very rich, but what exactly were they buying? Bitcoin was invented as an electronic alternative to money that can not be spent more than once, unlike other digital substitutes. Just as a real coin can not be spent by the same owner twice, every transaction made using Bitcoin is tracked, so that attempts to spend the same coin twice are identified. This chain of information – the "blockchain" – is almost impossible to change and each user has a local copy, rather than being part of a centralized system such as a bank or a government. This means that transactions must be transmitted to all users after being converted into blocks by a group of users called "miners".
Miners verify transactions by helping to solve mathematical problems using their computers, a process known as "job proof". The winner adds his own block to the chain and is rewarded with a certain amount of Bitcoin which is currently around 12.5 (approximately translating into $ 80,000) and is scheduled in half every four years. Over time, the competition between miners has increased continuously and the mathematical problems have had to increase in difficulty in order to maintain an average rate of block generation at 1 every 10 minutes. The calculation required to solve these problems is incredibly energetic, in fact it is estimated that the extraction of Bitcoin alone uses electricity at the same rate as all of Austria, although it is only to verify a small number of transactions per second.
Although many companies accept Bitcoins (including those from Oxford's JimBob), they have largely failed as usable currency. The power-hungry property of cryptocurrencies is just one of their biggest drawbacks. Low processing speed causes congested networks when transaction rates are high. There is no protection for consumers, for example if the USB stick containing Bitcoin has been lost, it would not be covered by insurance and, despite the promised security, its decentralized nature creates opportunities for hackers and scammers. Moreover, as seen with the serious price spike last December, it is very volatile and unstable, qualities not exactly ideal for a currency. The combination of these minor problems has meant that cryptocurrencies have not been at the height of their hype, however with recent extensive investments and explorations in their technology, who knows where they could be in 10 or 20 years.
Although several companies accept Bitcoin has largely failed as usable currency
The blockchain technology underlying cryptocurrencies is perhaps more exciting and versatile. By itself, blockchain has a variety of uses that maintain the decentralized and unchanging nature of Bitcoin, but it can remove the public aspect, giving access only to trusted users and removing the need for proof-of-work systems. The possible applications range from securing the legitimacy of diamonds to the distribution of medical records.
The University of Oxford jumped on the blockchain bandwagon. C & # 39; is a student blockchain company, a new research center for blockchain research and even a university created by members of university faculties. The Woolf University is on its way to becoming an institution that guarantees full bachelor's degree in the European Union. It is headquartered in Malta, which was recently coined the "Blockchain Island", but intends to offer mainly online teaching through Oxbridge-style one-to-one tutorials. The idea is for the student and the teacher to "check-in" through an app, creating an intelligent contract based on blockchain technology that ensures that the teacher is paid and that student earnings of micro-credits. A further alleged advantage of the blockchain would strengthen the validity of student titles, which means that they can not be falsified or their value can not be lost if the institution fails. Furthermore, credits could be earned through various suppliers and collected, making international teaching more feasible.
Finally, administrative costs could potentially be saved through automation. Joshua Broggi of the Philosophy department, who founded Woolf, thinks of it as "student uber, Airbnb for academics". The university aims to provide students with quality education for lower fees and to ensure better job security for academics. Definitely a good policy, but only time will tell if the benefits of blockchain use go beyond hype and advertising.