Once hailed as the arrival of a new form of currency and still believed to be a major factor moving forward, Bitcoin has lost a little bit of the edge with which it first hit the market. When the leading cryptocurrency first emerged, its proponents believed it was going to sweep aside traditional money to establish a new brand of international finance. Some of the initial valuation shifts reflected this belief, as Bitcoin skyrocketed in price to just under $1000 at the end of 2013.
However, enthusiasm has since waned. Bitcoin is viewed by some as gimmicky, and by others as having arrived too early or as something that’s just a little too complicated for widespread public use. The price has come back down to Earth, and while many now agree that Bitcoin is still a worthwhile commodity for the future, it’s not viewed as having the explosive investment potential it once carried.
Interestingly enough, as we’ve seen interest in Bitcoin as a commodity or functional currency cool off to an extent, a deeper value to the resource has gradually emerged: the underlying technology by which Bitcoin is stored and its transactions are monitored has actually spawned entire new businesses.
This technology is a vast computer network known as the blockchain that allows Bitcoin users to view all transactions ever made with the currency. More specifically, the blockchain is a log of activity that automatically records the sender, receiver, and amount involved with any Bitcoin payment. This system keeps all Bitcoin dealings public and transparent. It essentially functions as a massive, automated verification process, sharing all information from your actions except for the secure, private pin with which you authorize those actions.
This may initially sound like a service with utility purely for the digital currency for which it was designed, but the idea of a visible, public ledger recording transactions and user activities is already proving to be very useful in a variety of other environments. Numerous startup companies have already emerged with a goal to profit from various functions connected to Bitcoin, and a number of them are actually more focused on blockchain technology than on the currency itself.
Here are a few examples:
- Edgelogic is a precious resource registration and tracking company operating via its own take on the blockchain, called “Blocktrace.” The company is seeking to deter criminal transactions that take place with diamonds and other precious resources by registering stones on its digital system and tracking all their transactions, making a market that has historically been varied and mysterious far more transparent.
- Coinalytics is seeking to take advantage of the power of the blockchain by way of analytics. Given that cryptocurrency is still a relatively new concept, and opinions on the functionality of Bitcoin remain so varied, the potential for analytical assessment of blockchain activity could lead to an industry of its own.
- Factom wants to use the blockchain concept as it currently exists for record keeping in general. The idea here is that relying on a single filing system or record keeper to retain important information in a secure manner could become archaic if instead there were an option to record such information in a public, indisputable forum.
- World Passport is pretty much what it sounds like. The idea is for a blockchain network to be used for purposes of authentication of identity. Not only does this idea hold the potential to make conventional forms of identification eventually obsolete, but it could make identity fraud in general more difficult to perform.
As they stand now, those are all startups looking to become successful companies. But given the range of functions they perform and the simple but game-changing potential of blockchain technology, it’s easy to see how the Bitcoin technology could be paving the way for entire spin-off industries.