Digital Transformation via Bitcoin & NFT 1st View
Finance is always the first industry sector to go computerized and digitized outside of the core information technology domain. This is reflected by the heat generated by Bitcoin since it came out in 2008 (See Ref 1). Bitcoin can be seen as digital cash. It is not a digital twin of any national currency. It is a currency on its own right and is legal in many countries. As a currency, it can be used to buy, sell, and save similar as New Zealand Dollar. The beauty of Bitcoin is that the ownership of every coin can be verified easily (by those who know Bitcoin) whereas the average citizen cannot easily tell if the folding cash in hand is genuine or fake. Folding cash can be created by a government of sovereignty whereas Bitcoin can be generated by digital mining. How far the blockchain technology, which enables Bitcoin, can go? Recently it has given birth to Non-Fungible Tokens (NFT) which are highly interesting and taking blockchain to a new height. The purpose of this article is to visualize how the digital world may pan out for us in the not-too-distant future. As we all know, those who can read crystal balls have immense advantage over those who cannot.
- Beauties of Blockchain Technology
- Latest Bitcoin Roller Coaster Performance
- What is NFT?
- Prospects of NFT for mankind
Blockchain allows the ownership of each Bitcoin to be verified and this eliminate forgery attempts. The data describing a Bitcoin (or Blockchain object) is encrypted. The verification process is open and distributed. Open means anyone can do it. Distributed means no one has total control. These features make Bitcoins a lot more accountable than folding cash.
Bitcoin has increased in value over the last 15 years since birth to about USD23,000 per bitcoin (see Ref 2). As in an open market, the value of Bitcoin is decided by its perceived worth by buyers. It can be traded like a national currency or stock market share. It is a tradeable commodity pe se. Whilst the latest value may look very appealing, those people who entered the Bitcoin market in the last 2 years have suffered major losses. Bitcoin reached the height of about US$67,000 in November 2021. A large Bitcoin exchange platform called FTX has since collapsed owing its creditors a few billion US Dollars. The US Securities and Exchange Commission is handling the investigations as of 2023-01 (see Ref 3).
NFT is another product category based on blockchain technology for encrypted, open and distributed control. Bitcoin is fungible meaning that all Bitcoins have the same value. NFT is non-fungible meaning NFT-A does not have the same value as NFT-B and that both tokens are unique in the universe. A NFT cannot be deleted once created. It can be replicated as a new NFT with owner authorization. The original and the replication have unique identities respectively.
The uniqueness of a NFT appeals to a lot of people. A software application or a set of data can be constructed as NFT. Whilst the content can be duplicated or replicated, its identity cannot. This protects copyright/creation ownership. How much more peaceful and orderly would the world be without a single forgery? NFT can be used to construct a digital twin of our world. This theme is central to the concept of metaverse and illustrates how far the blockchain technology can go.
- Ref 1: https://en.wikipedia.org/wiki/Bitcoin
- Ref 2: https://www.xe.com/currencycharts/?from=BTC&to=USD&view=5Y
- Ref 3: https://www.npr.org/2023/01/18/1149002158/cryptocurrencies-ftx-bitcoin-sam-bankman-fried-sec-collapse
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Bitcoins and Non-Fungible Tokens (W06)
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