Bitcoin – the cryptocurrency created twelve years ago – is currently undergoing a second boom. In mid-December 2020, bitcoin surpassed its highest value since late 2017, when the currency last surged. Shortly after 2017, it crashed. So why the rise again now?
Back in 2017, you may remember everyone from your colleague to your grandma trying to get it on the action, but as a recent article in WIRED explains, in 2021 it’s corporations and investors that are mostly buying the cryptocurrency, as opposed to a public gold rush.
Some clear elements are driving this change, experts explain. The first is increased regulation, particularly in the US. In July 2020, it was announced that chartered banks could store clients’ bitcoins, also known as ‘custody services’. Then, in January 2021, that they could partake in a blockchain network. These changes are creating a sense of reliability and permanency that’s contributing to the rise in value. Plus there was the halving or “halvening” that happened in May 2020. This is an event that’s been built into bitcoin protocol since the beginning. Around every four years, the supply of bitcoin is cut in half to deliberately limit supply, and – you guessed it, increase demand. This creates a sense of scarcity, inevitably driving prices up.
Yet, another big factor for the price surge is sure to be global uncertainty. As economies look increasingly unstable due to the COVID-19 pandemic, with governments printing more cash and spending more, people are investing in bitcoin because it’s viewed as a good hedge – and one that is not issued by a central bank. Add to the pandemic recent political turmoil in the US, and you have the perfect storm to draw people to the (at least perceived) shores of a “safe haven asset”. In this landscape, a currency regulated by tech that promises transparency – blockchain – looks ever more appealing.
The fact that it’s corporations driving up the price of bitcoin right now might seem ironic, given that bitcoin came into the world as a way to trade on the dark web, or as WIRED put it, as an “anti-establishment tool”. It also may seem pretty cynical, banking on chaos and disaster. However, tech optimists see things differently; while big corporations and private investors might be the ones profiting from bitcoin (or not, since prices are already falling) there are ways in which the technology at the foundation of bitcoin could, potentially, benefit all of us.
Blockchain is not just the digital infrastructure where cryptocurrencies are exchanged, but a technology that can be applied in myriad exciting ways due to the fact that it’s a peer-to-peer network, an unmodifiable ledger for recording, storing, and sharing information. Innovators have long had big, utopian ideas about how blockchain can change the world, but as we prepare to navigate life post-COVID, its radical potential is coming into sharper focus. In the future, blockchain tech could contribute to healthier economies and more equitable societies around the globe.Here are three ways:
Restoring faith in governments and economies
Improving trust and regulation has been the sales pith of blockchain proponents for a while – but it feels especially important in a time when economies are strained. Transparency can address imbalances of power. Transparency allows us to hold people to account and expose corruption. Transparency means transactions that are more fair and equal.
“Blockchain offers a range of valuable qualities, particularly related to tamper-evident and permanent databases and record-keeping, that can help tackle government corruption,” the World Economic Forum explains, caveating that this technology must be paired with thoughtful legal frameworks and structures since blockchain alone cannot prevent crimes.
We’re a long way off the reality of it happening, but blockchain advocates would argue that wider implementation of the technology in government spending could also help to restore faith in governments and economies for individuals who are disillusioned… which many of us are in this particular moment, depending on how well our governments have handled the pandemic.
Governments like Estonia’s are already using blockchain technology for e-voting, tax returns, and residency. Many countries are also experimenting with blockchain tech in land title registries. For more countries to get on board with this technology, governments need to pay attention, grow their competence in the tech, and work collaboratively alongside entrepreneurs.
There also needs to be more public support – which means understanding blockchain as having big potential beyond bitcoin trading…
A better voting system
“How can blockchain-based systems be used in voting, or for elections?” is a question that’s long interested those who want to revolutionize democracy with technology. At a tumultuous time for American democracy, many are returning to this question, or wondering whether a more easily verifiable vote counting and storage system – a decentralized voting ledger – could have prevented accusations of fraud in the 2020 US Election.
While we’re not there yet, the question of what the next election could look like if we implemented this technology into vote-counting is a prescient one. Could using blockchain technology in elections increase poll accessibility? Minimize tampering? Improve voter turnout?
Partly, this type of election reform hasn’t happened yet because there are major issues with this big idea. Blockchain can keep votes safe, yes, but that doesn’t guarantee that the votes will be entered accurately. Also, the idea of implementing blockchain in elections calls to mind potential risks regarding voter privacy; demanding transparency from systems should not conflict with our demand for privacy as individuals.
Whether we’ll overcome these challenges to revolutionize elections in the future, remains an exciting area of potential…
Post-COVID-19 healthcare
In early December 2020, as news of approved COVID-19 vaccines were beginning to make headlines, so was the potential for blockchain technology to assist in their rollout. “Essentially each of these vaccines [..] requires two doses, so that’s two doses for really every person on earth,” Mark Treshock, blockchain solutions leader for healthcare and life sciences at IBM told Mobileheath News. “That’s a level of undertaking that is just beyond anything we have done as a society. To confound that [...] these vaccines are all different and they are not interchangeable.”
This is where the detailed tracking and data storage capabilities of blockchain could come in; we could store information on who has had which shot, as well as using blockchain verification for those who have had the vaccine to prove that they have had it – helping to reopen societies.
Treshock continued, pointing to existing problems around counterfeit drug markets, particularly in the developing world, saying: “this will be the most sought-after, counterfeit and probably diverted drug ever for the first six to 12 months after it comes out,” before naming blockchain as a possible solution.
The idea of tracking a supply chain via blockchain has been around for some time – coffee is the commonly cited example – but what if this tech could be applied to vaccines to ensure their value, quality, and safety? Just as startups proposed harnessing blockchain to track product supply chains, providing consumers with verifiable information to help us make more informed choices, we could create real-time data to prevent fraud and contamination around COVID-19 jabs.
Trials are underway, but this tech might not be realized in time for the rollout of the COVID-19 vaccine, given the present challenges – such as who will coordinate the implementation of this tech, issues around training, and the number of skilled blockchain experts required to oversee a rollout, plus GDPR and privacy concerns around personal data, especially when it comes to vaccination passports. However, if we can overcome these challenges, potentially using AI to cross-check data, we could use this technology to overcome future global crises and pandemics.
As for the proven negative mental health fall out of COVID-19, Deepak Chopra suggested in 2020 that he is trialing the use of blockchain in a platform to democratize access to mental health resources. Chopra told Forbes how his ‘Never Alone’ initiative would eventually use distributed ledger technology to centralize best practices and trace content and conversations – an urgent mission when so many are isolated and out of work.
Overall, there are multiple inspiring possibilities for the application of blockchain in healthcare and beyond. All of the time, blockchain innovators are figuring out ways to use the tech to decentralize power, to optimize the systems we take to be a given, and to reshape the future.
Looking at blockchain beyond bitcoin is the first step in a blockchain revolution. Turning these big ideas into a reality is the grand challenge to come.