Even sophisticated business people may picture alternative currencies as a passing fad or only interesting to people who participate in underground economies. According to Dr. Garrick Hileman of the Cambridge Judge Business School, this assumption isn't supported by data.In fact, both digital money and the technology that allows it to exist have a growing impact upon business and the economy. With this in mind, it might help to learn some basic facts about alternative currencies and how they might impact today's businesses.
What to Know About Blockchain and Alternative Currency
Dr. Hileman pointed out that the combined capitalization of various electronic currencies, like Bitcoin, have a value of at least $40 billion. Tens of millions of users have electronic currency wallets, and at least three million of these users are very active. In addition, such large enterprises as PayPal, Dell, and Microsoft accept alternative currencies for payment. Of course, so do a number of smaller companies, startups, and independent developers. The value and attention that these new kinds of electronic transactions have gained should legitimize them.
To gain a basic understanding of alternative currencies and the technology that support them, it might help to read this brief introduction to blockchain technology and major players in the digital currency market:
Understanding Blockchain Technology
Typical database management systems handle updates on a master server. Though many users may access information from their own devices, they only see the latest version of the data that resides on that central repository. Blockchain technology is capable of sending secure and accurate transactions over a very distributed network.
As Gizmodo describes it, blockchain can be compared to a crowd-powered and decentralized database service that relies upon cryptography and not upon one central authority. Basically, the purpose of this technology is to empower safe transactions in an environment when different participants may not trust each other. This is the technology that allows electronic currency users to make and accept payments. Some platforms allow for the exchange of other kinds of assets or even information, so the use of blockchain isn't only limited to digital currency. Companies could apply it to many different applications that require distributed computing and secure transactions.
Major Digital Currencies
It might be helpful to compare these three important alternative currencies in order to understand the overall market:
- Bitcoin: When most people think of digital currencies, they think of Bitcoin. This trendsetter entered the market in 2009, generated interest in alternative currencies, and is still the basic standard that other alternative currencies get compared to. According to Forbes, Bitcoin's total capitalization dropped below 50 percent of the entire market for the very first time in May of 2017. Currently, Bitcoin is still the most liquid digital currency. It also still has a larger capitalization than any single one of its competitors.
- Ethereum: Introduced in 2015, Ethereum's total market value is ranked second to Bitcoin. The company says that their platform is more than just a way to exchange money; it also offers a way to exchange just about anything. For instance, the platform can be used to exchange pledges, contracts, voting, and shares. Some other potential advantages of Ethereum over Bitcoin may be faster block speed and more accessible digital coins.
- Litecoin: Introduced in 2011, Litecoin was one of the first major alternative currencies to follow Bitcoin. It works similarly to Bitcoin. In some circles, it's described as the silver of the digital currency market, and Bitcoin is described as the gold. In other words, it's easier to obtain a Litecoin, but each one isn't valued as highly. Litecoin technology can generate blocks faster, so users enjoy a faster transaction process. It's mostly popular with developers, but some other vendors are beginning to accept Litecoin.
How Will Alternative Transfers Impact Business?
Of course, every company's use for these kinds of transactions will vary. Some organizations will have no use for them, but many large tech- and transaction-based businesses have found ways to absorb either digital currency of block chain technology. It's important to remember that blockchain doesn't just offer a way for people or businesses to exchange money but also to conduct many other kinds of transactions.
Does your business need to acquire the right talent to safely make use of emerging technology? If so, you can count on us here at ICS to use what we know about you, our people, and technology to supply your needs. We can help you grow your permanent staff, scale with temporary talent, or test out recruits on a contract-for-hire basis. Just let us know a little more about who you'd like to hire, and we'll tell you exactly how we can exceed your expectations. Submit a job or contact us today.