The best is yet to come for the innovations of Bitcoin and Cryptocurrencies

Nobel Prize Paul Romer: The best is yet to come for the innovations of Bitcoin and Cryptocurrencies

The best is yet to come for Cryptocurrencies, Innovations and Cryptography

While the encrypted can reach the respective funds and the lower supports, the innovation and the potential for the use and the institutional application are not even remotely close. Speaking with Bloomberg, Nobel Prize winner Paul Romer shared his insights into the application of cryptography for the money of the future.

So where does this application of blockchain technology come from in the world of finance and the money movement? The answer includes a number of attributes, one of them, according to Romer – Cryptography.

"The first thing we need to consider is that cryptography is very important, and it's something we need to strengthen our use of cryptography if we want to keep things safe."

Cryptography, for those who otherwise would not know it, is a means of protecting the data necessary for it and, by extension, the money transaction. The value? Encrypting and protecting data means that it is much more difficult for unsolicited third parties to intercept and use that information.

and consists of four main attributes:

  • Confidentiality – It refers to the protection of third party data / information and unauthorized access
  • Privacy – This refers to the protection of information from individuals.
  • Not repudiation – This means that the inability to deny specific action has taken place, allowing it to be a completely objective system.
  • Integrity This refers to an intrinsic safety for users that manipulation can not and will not happen to their information.

By simply going into shallow depth about what the cryptography is, the value of Blockchain can be made evident. This need for cryptography, explains Romer, is due to the great diversity that exists with financial transactions.

"There are many ways to get digital and financial transactions.The best way to think about this is as an accounting exchange system, and credit cards are an example of this."

So where does blockchain technology come from? Two words: Trustless Technology, as Romer explains.

"Some entities [for systems of exchange] working with some banks works to keep track of all these transactions and who owes what to whom, "Romer continues.

"The difference with Bitcoin is [that] is trying to create an accounting exchange system like that, but with nobody [that] you have to trust yourself. C & # 39; is a group of totally independent people who have a reason, based on this idea of ​​extraction, to keep track of the Ledger [Distributed Ledgers]".

Although this year was one of the uncertainties for the cryptocurrency market, it was even more significant for the stock market and also for centralized banks. The latter, having been involved in a series of disputes, such as the recycling activities perpetrated by Danske Bank, and the most recent activities with Goldman Sachs.

Trust is something that centralized systems and governments are losing rapidly, as a Bloomberg host responds nervously to a cryptographic ecosystem without trust.

"In all honesty, it should make you a little nervous if you have a government that is otherwise dissolute with its money and expands its deficit accordingly.A lot of theory behind Bitcoin and Cryptocurrencies is that people do not want to trust a government to block a currency ".

While some of these hesitations are well deserved by those who pay attention to the news, Romer argues that governments and banks have at least managed to create greater stability during inflation inflation cycles.

"This idea that the government can not manage it or can not do it the right way, I think it is overestimated."

But Romer is certainly a staunch advocate of innovation as a means of market growth, and considers Blockchain technology to be one of those innovations, but we are only at the tip of the iceberg when it comes to real cases, according to Romer.

"We have not yet seen the full application of the technologies that have been invented: cryptography, for example, there are ways to protect all our communications and keep our secrets secret, but they are not used," Romer continues.

The invisible, long hand of application

Whether it is to support logistics, or the level of information about a food supply chain, to the world of high-powered finance, Romer expresses the awareness that there is a large margin of application for the blockchain.

"Being able to track down a product on a supermarket shelf directly from the supplier would be a great thing, whether it be on Blockchain or not."

Tip of the iceberg or not, at this point in time, Romer seems to consider the early blockchain decentralized methods as interchangeable with centralized solutions, and early youth and lack of use cases could very well be the reason for that. .

This is a state of affairs that will not last long, as Kelly has brought with CNBC. With a much higher institutional interest rate, both in blockchain technology and in the cryptocurrency market, we are already seeing large companies like Amazon playing with blockchain to get them to function as a service tool.

Diplomacy of the dollar? Is Bitcoin a threat to the dollar?

While we can argue that blockchain technology has created a number of winners, those who were early adopters or investors, to companies involved in taking a high share in cryptocurrency mining or equipment production, Romer believes that Blockchain has, in its own way , generated a certain degree of inequality, which is difficult to agree.

The first adopters and investors in this technology can not be considered as the beginning of an unequal system, only that they were the first to adopt. When it reaches a point of mass adoption, the market will no longer be dictated by those who are technologically sound enough to put it into practice.

But aside from the kind of market Bitcoin is involved with right now, Romer was fascinated by the prospect of Bitcoin as a rival to the US dollar. It was an intriguing question, but that he thought did not have an immediate force on the American currency.

"I predict that in a hundred years there will be at least a second alternative to the dollar and the Fed [Federal Reserve] as a compensation bank for the world … And this is still up for grabs now. "

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