How the United States can utilize Bitcoin and blockchain technology for consumers
Blockchain technology and cryptoassets are often misinterpreted as symbols of chaos and rebellion, but in reality, they represent a community of tech enthusiasts striving to address significant issues. This group, given appropriate government regulations, could contribute immensely to the economy. However, inadequate policies could pave the way for fraudulent activities to flourish.
As an expert in cryptoeconomics, I can attest that blockchain technology is rapidly gaining momentum, with both risks and opportunities on the horizon. The inception of the cryptoasset craze can be traced back to 2008 when the Bitcoin Whitepaper introduced the world to the Bitcoin blockchain. This revolutionary technology functions as a digital ledger tracking bitcoin transactions in blocks chained together over time. What sets bitcoin apart is its “permissionless” nature, eliminating the need for centralized authorities like banks for payment settlements.
Cryptoassets have the potential to foster a more competitive market, benefiting consumers. While there are nefarious players in the cryptoasset sector posing risks, it is crucial to highlight two key factors about Bitcoin. Firstly, Bitcoin is founded on sound computer science principles utilizing cryptographic tools and a spam-fighting protocol. Secondly, Bitcoin’s groundbreaking solution to the double-spending problem revolutionized the traditional financial system, eliminating the necessity of intermediaries to prevent fraud effectively.
Despite Bitcoin’s groundbreaking impact, Ethereum emerged in 2015, redesigning the landscape by offering a versatile platform for an array of applications. Unlike Bitcoin, Ethereum functions as a virtual computer, enabling the creation of programs delivering financial services without intermediaries. The deployment of such programs on the Ethereum blockchain fosters a competitive market environment, benefiting consumers through services like trading, borrowing, and lending.
The blockchain community achieved significant milestones, overseeing the daily movement of billions of dollars through computer programs that maintained financial stability during market fluctuations. Bitcoin acted as a catalyst, sparking interest among developers globally to enhance financial service provisions through technology. Moving forward, it is imperative for government policies to align with technological advancements rather than impede them. President Donald Trump’s executive order on crypto signifies the importance of embracing its reality and working alongside it instead of resisting or alienating it.
Government policies that support the blockchain community, akin to their role in the internet’s development, can bolster technological innovation while ensuring user protection through reasonable safeguards. Fahad Saleh, Ph.D., an associate professor at the University of Florida, specializes in analyzing economic implications related to blockchain and cryptoassets.
