Cryptocurrency and blockchain “news” is dominated either by enthusiasts (who claim that they will impact everything, from computerized record keeping to litter box cleaning) and detractors (who claim it is all a giant pyramid scheme that will leave a few people rich and many more broke). Nuance is difficult to find.
In the hope of providing that nuance, let’s look at the best arguments from the proponents and the cynics.
The basics of blockchain
Blockchain is essentially a digital ledger. The ledger is kept secure through a combination of techniques from cryptography, game theory, and computer science. Each block — like a page in a physical ledger — is chained to all the previous blocks showing all of the transactions that have ever taken place on the network. These transactions are available for anybody to review. Any attempt to hack or cheat the network can be detected quickly and prevented because of this transparency, along with a few other, more technical protections.
While blockchain can do a lot of things, it is most famous for being the foundation of cryptocurrencies — chief among them are Bitcoin and Ethereum.
Bitcoin, as we have discussed before, is a digital form of cash that uses blockchain technology to keep track of transactions. The Bitcoin network — that is, the decentralized collection of computers keeping track of transactions — can send…