Is Blockchain Technology Seriously Overvalued?
What amazes me these days is how people can take an idea and place a value on it, without fully understanding the idea. Then numerous 3rd parties leverage this idea into new ideas and package them into speculative instruments and trade them. When the idea in the first place is really not an idea, but an educated guess, with secrets you get the Bitcoin.
What is Blockchain Technology?
Please it was not invented by Satoshi Nakamoto, this technology has been around since software was invented. There is nothing new or cutting edge with it. In fact I would argue Napster was one of the first to leverage this type of technology in the mainstream, but who remembers that? Just look at the word itself “Block” and “Chain”. For the non-tech people out there which means most of everyone, Blockchain is a chain of blocks that continuously grows. Think of opening a Microsoft Word document, then force your cat or dog to jump up and down on the keyboard, now look at the word document…there you just created a blockchain. The cat and dog is the encryption. Now this chain of blocks is saved across multiple computers (nodes) all over the planet. Each time the cat or dog is forced to jump up and down on the keyboard the block is updated and this chain grows and must be verified on ALL the nodes in the chain at the same time, if one computer fails the process must start all over. Nothing in the Chain of blocks can be deleted it just grows on forever. I am not going to get into the all the bells and whistles of the processes but in a nutshell that’s it.
This creates major problems when we deal with cryptocurrencies like bitcoin, along with all the other stupid guesses being thrown around right now. As the chain grows it consumes more resources. Each transaction would require more energy than the previous one, because the chain has grown.
There really is no value to Cryptocurrencies when the core technology continues to grow in size. Kicking the can down the road hoping that we technology people will fix it or write temporary fixes hoping that other factors of the industry will create software and hardware systems in the future to keep up with the chain demand is nuts. Does anyone remember Y2K?
What I find very upsetting is that the cryptocurrencies idea was to bring free money transfers to everyone on the planet, and to remove the trusted 3rd party from the transaction. Sadly the trusted 3rd parties that cryptocurrencies where supposed to remove have embraced this technology. Private Blockchains VS Public Blockchains boy sounds like a cloud computing conference. Obviously Blockchain technology was flawed from the beginning when it came to Cryptocurrencies for the individual.
I do agree that fiat currencies are under a lot of pressure, yes the markets appear to be fixed, yes the paper gold and paper silver markets are overleveraged, but I will tell you Blockchain Technology is Seriously Overvalued and it is NOT the answer in the long term. Unless you want to wait 30 to 45 minutes for your Bitcoin mastercard to process your peer to peer transaction block for your lunch or dinner, and have huge amounts of servers consuming huge amounts of energy for your transaction, say goodbye to your bandwidth too. The internet crawls to a stop…
Good luck out there.
We do use Blockchain Technology in systems that track transmission of encryption cycles of network communications between groups of nodes, so this technology is useful. If speed is of no issue, and security is, then this type of Technology is interesting, but then again other technology does a better job. I wouldn’t give huge amounts of value on Blockchain Technology, and have industries be able to borrow large sums of venture capital based solely on this technology, remember the .COM crash?
Good luck out there!