Well, it has been a fun party. Here is a chart of Bitcoin prices over the last year or so. Folks that bought in before December were up X4 or more by April. Woo-hoo! But prices have dropped by half in the past two months. Many articles were published over the winter justifying ever greater heights for Bitcoin. It was to be the digital equivalent of gold as a store of value. Also, it is touted as being decentralized and free of government manipulation – – a global, privatized people’s currency. What happened?Continue reading
Samford Business student Wes Crane writes: Remember when people used to buy and sell physical sports trading cards? Recently the NBA has partnered with Dapper Labs, a company that specializes in blockchain (the same technology used for Bitcoin and Ethereum), to create and sell a digital art form of non-fungible tokens, or “NFT”s, that contain video clips of highlight moments which can be traded online at https://nbatopshot.com.Continue reading
Most of our financial transactions are managed by centralized institutions like banks and credit card companies. We trust that these companies will properly manage transactions, so no one can spend the same dollar twice. In other words, if you have $300 in your checking account, you can’t use your debit card to buy a $300 message chair, and then quickly purchase a $300 patio furniture set before the first purchase clears.
Satoshi Nakamoto, the enigmatic inventor of Bitcoin, wanted to set up a digital currency which would not be controlled by or dependent on any central institution. Rather, there would be a big network of thousands of independent computing nodes, which collectively would record and vet financial transactions. A big problem he faced was how to prevent the sort of double-spending described above. With a decentralized system, it was possible that one node, or a couple of nodes in cahoots, could quickly enter two transactions which would spend the same chunk of digital currency twice, before the rest of the nodes could catch the error. And without a central authority, who would have the authority to correct such errors?
Nakamoto’s solution was the blockchain. He defined and implemented it specifically for Bitcoin, but the concept is so elegant and powerful that hundreds of other digital coins were quickly set up also using blockchains. This in turn has spawned a whole multi-billion dollar “decentralized finance” industry around these blockchain based currencies.Continue reading