Question

CURRENT TRENDS;

this section should present a sampling of the current research in your chosen area. if studies or projects have been done that are similar to what you are considering doing, they should be discussed in this section.

include subheadings in this section- relevant to your topic in a clear and coherent order.

my topic is Bitcoin and blockchain and it should be 4-6 pages

Answer 1

The blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater, and the main question every single person is asking is: What is Blockchain?

By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, (Buy Bitcoin) the tech community has now found other potential uses for the technology

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A blockchain carries no transaction cost. (An infrastructure cost yes, but no transaction cost.) The blockchain is a simple yet ingenious way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virtually impossible. Bitcoin uses this model for monetary transactions, but it can be deployed in many others ways.

Think of a railway company. We buy tickets on an app or the web. The credit card company takes a cut for processing the transaction. With blockchain, not only can the railway operator save on credit card processing fees, it can move the entire ticketing process to the blockchain. The two parties in the transaction are the railway company and the passenger. The ticket is a block, which will be added to a ticket blockchain. Just as a monetary transaction on blockchain is a unique, independently verifiable and unfalsifiable record (like Bitcoin), so can your ticket be. Incidentally, the final ticket blockchain is also a record of all transactions for, say, a certain train route, or even the entire train network, comprising every ticket ever sold, every journey ever taken.

But the key here is this: it’s free. Not only can the blockchain transfer and store money, but it can also replace all processes and business models which rely on charging a small fee for a transaction. Or any other transaction between two parties.

Here is another example. The gig economy hub Fivver charges 0.5 dollars on a 5 transaction between individuals buying and selling services. Using blockchain technology the transaction is free. Ergo, Fivver will cease to exist. So will auction houses and any other business entity based on the market-maker principle.

Even recent entrants like Uber and AirBnB are threatened by blockchain technology. All you need to do is encode the transactional information for a car ride or an overnight stay, and again you have a perfectly safe way that disrupts the business model of the companies which have just begun to challenge the traditional economy. We are not just cutting out the fee-processing middle man, we are also eliminating the need for the match-making platform.

Because blockchain transactions are free, you can charge minuscule amounts, say 1/100 of a cent for a video view or article read. Why should I pay The Economist or National Geographic an annual subscription fee if I can pay per article on Facebook or my favorite chat app. Again, remember that blockchain transactions carry no transaction cost. You can charge for anything in any amount without worrying about third parties cutting into your profits.

Blockchain may make selling recorded music profitable again for artists by cutting out music companies and distributors like Apple or Spotify. The music you buy could even be encoded in the blockchain itself, making it a cloud archive for any song purchased. Because the amounts charged can be so small, subscription and streaming services will become irrelevant.

It goes further. Ebooks could be fitted with blockchain code. Instead of Amazon taking a cut, and the credit card company earning money on the sale, the books would circulate in encoded form and a successful blockchain transaction would transfer money to the author and unlock the book. Transfer ALL the money to the author, not just meager royalties. You could do this on a book review website like Goodreads, or on your own website. The marketplace Amazon is then unnecessary. Successful iterations could even include reviews and other third-party information about the book.

In the financial world the applications are more obvious and the revolutionary changes more imminent. Blockchains will change the way stock exchanges work, loans are bundled, and insurances contracted. They will eliminate bank accounts and practically all services offered by banks. Almost every financial institution will go bankrupt or be forced to change fundamentally, once the advantages of a safe ledger without transaction fees is widely understood and implemented. After all, the financial system is built on taking a small cut of your money for the privilege of facilitating a transaction. Bankers will become mere advisers, not gatekeepers of money. Stockbrokers will no longer be able to earn commissions and the buy/sell spread will disappear.

Recent trend in Block chain

Trend #1: The arrival of Security Tokens

As 2018 marched along and the utility token market saw a slowdown, industry has been rife with talk of the arrival of security tokens. This is for good reason.

The market has long-waited for the grand entrance of institutional investors – but they have not yet significantly entered the market. This has partially been attributed to the core offerings of ICOs. Utility tokens offering usability are simply not substantial enough to investors, who are used to buying stakes in companies.

Enter security tokens. The familiarity of the IPO world coupled with the benefits of blockchain is an offering that promises to redefine the IPO business. The idea of programmable equity brings possibilities of immense liquidity and efficiency at lower costs. Coupled with access to global pools of capital, 24/7, opportunities abound.

However, it is still a promise, as the market infrastructure for listing and trading security and asset tokens is still in the works. But the change is coming, with 2018 seeing major crypto exchanges applying for brokerage licenses in preparation. With the market still nascent – we expect to see the opening of exchanges with security token trading functionalities in 2019. However, it is likely in the early stages that liquidity will be limited.

The success of security tokens is contingent on digital asset exchanges being up and running. Alongside crypto exchanges like Coinbase, Binance and Lykke seeking regulatory clearance for security tokens, we also see traditional players like Nasdaq, London Stock Exchange and the Swiss Stock Exchange developing digital asset platforms, signs indicating that market infrastructure will be in place by the second half of 2019. As processes stabilize and regulatory concerns are addressed, we will see the launch of several STO projects towards the end of 2019, with major activity and more liquidity in early 2020.

Trend #2: The rise of Alternative Asset Classes – move from crypto to digital assets

With several indicators pointing towards the possibility of a global slowdown especially in the equity and bond markets in the coming year, investors are on the lookout for alternative asset classes. With the developing market for security tokens, there are immense possibilities in the tokenization of well-performing assets that previously lacked liquidity. Consider healthy Small-Medium Enterprises (SMEs) and Real Estate Assets, that tend to have robust returns, but lack wide market access.

While they may not be able to afford public market listing, opening up to global markets of investors could provide an infusion of capital that could help scale their businesses. With over 90% of companies in operation globally listed as SMEs, the potential for growth is significant.

Trend #3: The creation of Decentralized Ecosystem Platforms and new business models

Of all the methods to harness the power of blockchain, one that has piqued interest across borders and industries is the possibility to develop B2B2C ecosystems. A McKinsey study from 2017 reported the importance of ecosystems in the future, suggesting that new ecosystems would emerge in place of many traditional industries with over $50 trillion in revenue by 2025. Not unlike e-commerce in the nineties, the vast potential for growth and disruption with decentralized P2P ecosystems is yet to be discovered.

In enabling efficient peer-to-peer transactions through shared APIs, the potential of a smart contract-powered decentralized ecosystem is vast. This also involves the construction of new business models, in a frame of cooperative competition, with competitors coming together to build up ecosystems that connect various players through the lifecycle of any product and the end-to-end delivery of services.

While this concept has already seen some implementation in 2018, the experiments have brought learnings rather than success. The experiments have helped identify complications in implementation, such as the need for a business governance model that allows all ecosystem players to have a voice without any single leader.

The learnings from unproductive experiments open up the gates for more progress in 2019, with innovative new decentralized ecosystems being developed by the end of the year.

Trend #4: The real winners – Hybrid Models

It is more and more widely accepted that blockchain is here to stay. Even as the technology turns toward the trough of disillusionment on Gartner’s hype cycle, comes the investment in technology development and greater regulatory clarity.

At the end of 2018, blockchain remains the darling of the tech-savvy, but is still perceived as a vague, not-quite-understood, new entrant to the tech conservative. The true winners of 2019 will be companies that are able to bridge the crypto and fiat worlds, enabling digital links between the two. This linkage is a necessity across industries, from storage, trading, asset management of digital assets to real world applications of technology for the bystander, such as voting and land-registry.

The end of 2018 also marks the end of the crypto-hype, and we welcome the next phase of development of digital assets as we move up the slope of enlightenment and toward the plateau of productivity.