Follow the money. And who controls it – the banks.
Soon you won’t be able to see or touch your cash in the coming global cashless society.
From Bitcoin to Citicoin to SETLcoin, the world is moving to digital currency. Forget those vaults where cash once was stored. Digital dough will be stored and transacted electronically.
And driving this digital currency rush is blockchaining, technology that’s legitimizing and servicing a cashless world.
Indeed, the biggest of the too-big-to-fail banks are teaming up to harness blockchain technology to manage and settle financial transactions. And the World Economic Forum predicts that blockchaining is speeding toward a central role in the global financial system.
Already, about $20 billion in value worldwide is traded inside chains.
The technology is complex, but here’s a simple outline. A “block” is a record of a transaction between two people that’s permanently stored in a database. The database is encrypted so the record of transactions can never be hacked or altered. A “chain” is a series of blocks stored in the time order in which they occurred. (Think of a chain as the register in your checkbook and a block as a single entry in that register.) Also, every member of a blockchain has a copy of it, so there’s no central server to be hacked.
Beyond digital dough
To access your digital funds, you need a digital key that lets you into the database and a second key that opens your personal account in the database. Only when you have both can you get hands on your money. It’s a double layer of security.
The transactions also don’t require a bank or other middleman. For example, the “Transactive Grid” in Brooklyn, New York, uses blockchains to link houses that have rooftop solar panels to their neighbors who want to buy solar electricity. The blockchain database records the transactions and handles billing.
The technology’s advanced encryption methods also have led a British cybersecurity firm to adopt blockchaining to protect data. As cars and other objects link to the internet, the technology’s security uses will soar.
In the same way, blocking can protect records ranging from your school transcripts to your vote in the next election. Microsoft is mulling a blockchain-based identity system that it thinks could curtail human trafficking. The Jetcoin Institute has even suggested using blockchains to let sports fans invest in their favorite athletes and share in the sports stars’ future earnings.
Overall, more than $1.5 billion has been invested worldwide in blockchains’ possibilities.
Major companies are betting big on blockchains’ future. In 2015, Virgin’s Richard Branson hosted a “blockchain summit” on his private Caribbean island. Goldman Sachs has put $50 million into start-ups creating their own blockchains; IBM has announced a commitment to make blockchains a key business technology.
And more recently, the US Federal Reserve, Bank of England and Bank of Canada announced plans to examine the pros and cons of digital currencies.
TRENDPOST: Unless there’s a populous movement against it, cash has no future. Even in emerging markets, from Kenya to Ecuador, replacing cash with digital transactions is a growing trend. But beyond digital currency, the fast-emerging technology of blockchaining will expand beyond traditional banking roles and become more integrated into daily life. It will be used to store, share and protect data of all kinds.