Different aspects of blockchain: Blockchains can solve the problem of Big Tech’s power

Source: The post different aspects of blockchain has been created, based on the article “Blockchains can solve the problem of Big Tech’s power” published in “Live mints” on 20th March 2024.

UPSC Syllabus Topic: GS Paper 3-Indian Economy, Money and banking

News: This article discusses how blockchain, the technology behind Bitcoin, is more than just for cryptocurrency trading. It’s a type of virtual computer used for various applications like decentralized finance and social media. The article suggests focusing on these uses, not just trading. Blockchains can solve the problem of Big Tech’s power

For details information on Bitcoins read Article1, Article 2

What is the main issue with Bitcoin?

High Volatility: Bitcoin’s value changes dramatically. For example, it recently dropped 7% from its peak value in a very short time.

Limited Supply: There are only 21 million Bitcoins. This scarcity can cause big price swings with small market changes.

Investment Risk: Due to these rapid fluctuations, Bitcoin is seen as a risky investment.

Government Concern: Governments worry about people losing money. They view Bitcoin more as a commodity needing regulation to protect citizens.

What are the different aspects of blockchain?

Casino Aspect: This refers to the speculative trading of cryptocurrencies like Bitcoin, highlighted by its recent 7% price drop and rapid changes in value.

Computer Aspect: Blockchain acts as a virtual computer, handling tasks like data storage and changes across a distributed network. This is key in decentralized applications.

For information on blockchain read here

What are the uses of Bitcoin?

Decentralized finance: It doesn’t need middlemen.

Supply chain management: Companies can track things without relying on others.

Decentralized social media: Users can interact without being locked into one platform.

What should be done?

1. Need to focus more on blockchain’s broader uses, like decentralized finance and social media, rather than just cryptocurrency trading.

2.Encouraging the adoption of blockchain in various sectors can offer benefits similar to Big Tech but with more freedom, as seen in applications like Farcaster.

Question for practice:

Discuss the main issues with Bitcoin and the different aspects of blockchain.