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Colin Devroe

Reverse Engineer. Blogger.

What is Blockchain and Bitcoin?

September 28, 2017

Paul Bouchon at Site Pen:

Much like the term “cloud”, the term “blockchain” is heavily overloaded and oftentimes used incorrectly. Without delving into the historical origins behind the confusion around the term itself, let’s understand exactly what a blockchain is.

He goes on to clearly explain blockchain and Bitcoin. Be sure to read it if you’ve been fuzzy on the topic before reading further.

My take on this has been the same since I first heard about Bitcoin and blockchain and I’ve only touched on it lightly here on the blog. So perhaps this is a good a time as any to articulate my perspective on this.

I’m far more interested in blockchain technology and services than I am about Bitcoin. Think of Bitcoin as the US Dollar. Would you rather invest in the dollar itself or in technology and services around the dollar? The opportunity comparison isn’t very close at all. Now, imagine those same blockchain technologies and services could be used for other digital and crypto-currencies. Now imagine the myriad of other uses outside of finance there are for blockchain.

Bouchon appropriately points out that we’ll see a slew of misapplications of blockchain – likely the same way we saw the misapplications of web sites. The internet is awesome. But it will never solve every human problem. Blockchain is fantastic and has more applications than I can possibly list, but don’t be surprised if you see some dumb ideas that get funded and burn cash (or, Bitcoin).

When I’m speaking to someone about this I inevitably get the same question: “Yeah, but can’t you make money with Bitcoin?”. You can, yes. There are some that have made substantial amounts investing in Bitcoin itself. And there will continue to be some. But the number of people that will earn a return on Bitcoin itself compared to those that do on blockchain will be laughable in 20 years.

Or I could be wrong. 🙂