The future is bright, and it’s driven by the blockchain.
Blockchain technology is already turning the financial industry upside down through its disruptive applications, but finance is only the tip of the iceberg. The blockchain’s true scope is in its ability to change the way you do things every day – like voting, travelling, or going to the doctor.
The Future of Blockchain
Today’s infographic comes to us from HIVE Blockchain Technologies, and it gives us a glimpse into the potential of blockchain technology beyond the world of finance.
While the blockchain is primarily associated with cryptocurrencies and the financial industry, the true potential of blockchain technology is much broader.
Innovative startups are already finding ways to leverage blockchain technology to give facelifts to nearly every industry imaginable, changing traditional practices to make way for new, disruptive business models.
It’s difficult to imagine an area of life that won’t lend itself to a blockchain-fueled upgrade.
In its current form, the blockchain works something like this:
- Party A wants to transact with Party B
- This transaction is recorded on the blockchain as a block of encrypted data
- This block is then broadcast to every participant in the blockchain network. The block itself is visible to all, but sensitive information is encrypted to protect the privacy of both parties
- Each participant on the blockchain checks the validity of the block, confirming that everyone has the same version of encrypted information to eliminate the possibility of tampering
- Once verified, the block is added to the chain. Once added, it can’t be moved, changed, or tampered with
- Now that the transaction has been verified, it proceeds as planned
Currently this technology is primarily used for financial transactions, but it can also be used to exchange information, contracts, and official records.
The Blockchain’s Limitless Potential
The unique design of the blockchain makes it ideal for situations requiring:
Transactions are virtually tamper-proof. Because each participant on the network checks each block for consistency, trying to hack the blockchain would be like trying to sneak through a single door guarded by a hundred dogs. It can’t be done.
Each block is visible to every member of the network, ensuring trust between parties.
Because a blockchain has no borders, it allows for secure collaboration between parties sharing any kind of transaction.
As a result of these traits, the blockchain has limitless potential in all kinds of applications.
Future Blockchain Uses
Here are just some examples of future blockchain uses.
The blockchain can be used in business and government to increase transparency between parties, reduce corruption, and streamline bureaucracy. Transactions are tamper-proof and open to the public eye, allowing everything from rental agreements to national elections to be made fair and equitable.
The blockchain has the potential to improve medical access and efficiency. By allowing patient records to be shared securely between healthcare providers, doctors can bring all that information together to improve their diagnoses and develop more holistic treatment plans for individual patients.
With the wealth of patient data collated on the network, blockchain technology can help to advance more sophisticated medical research, potentially curing diseases or providing insights for more effective treatments.
Identity theft could also become a thing of the past with blockchain and biometrics. All of your personal identity information – even your passport, educational records, and driving licence – can be securely stored on the blockchain. Because your data is linked to biometrics unique to you and impossible to forge, the information is safe from fraud.
But these are just some examples – and the blockchain will impact nearly every facet of our lives, allowing service providers collaborate with one another to give you unique, personalized service, when you need it.
Mapped: Cryptocurrency Regulations Around the World
Cryptocurrency regulations are essential for the future of digital finance, making it more attractive for businesses, banks, and investors worldwide.
Mapped: Cryptocurrency Regulations Around the World
Following the unprecedented cryptocurrency boom in 2017, investors and governments alike could no longer ignore the growth of decentralized finance.
The world has become increasingly fascinated with cryptocurrencies and the ways they are enabling greater access, such as being able to send funds to remote places or securing capital for small businesses.
To aid this, cryptocurrency regulations are being slowly introduced into global financial markets. Regulations help to monitor these emerging digital currencies, and to allow for clearer guidelines and a measure of security.
The Regulatory Landscape
Today’s graphic from ComplyAdvantage maps out major regulatory cryptocurrency and exchange landscapes around the world, showing how sentiments towards digital currencies are evolving.
To do this, ComplyAdvantage measured cryptocurrency regulatory environments using their own Light-to-Tight scale, based on the following criteria:
- Cryptocurrencies and exchanges status? (Ban = 3 points, Regulated = 2 points, Grey Area = 1 point)
- Cryptocurrency considered legal tender? (Yes = 1 point, No = 0 points)
- Planned legislation to increase crypto regulation? (Yes = 1 point, No = 0 points)
Which jurisdictions have the strictest and most relaxed regulations for cryptocurrencies?
Regulations by Region
Global attitudes towards the rise of cryptocurrencies have shifted greatly over the past few years. While the term cryptocurrency is a bit of a misnomer, some countries do consider digital currencies legal tender, with many viewing cryptocurrencies as commodities.
Below is a table of the major countries that are pursuing cryptocurrency regulations:
|Country||Cryptocurrencies||Exchanges||Initial Coin Offerings (ICOs)|
|Australia||Legal; treated as property||Legal, must register with AUSTRAC||Regulated|
|Switzerland||Legal; generally accepted as payment||Legal, regulated by SFTA||Regulated|
|Malta||Not legal tender||Legal, regulated under the VFA Act||Regulated|
|Estonia||Not legal tender||Legal, must register with the Financial Intelligence Unit||Regulated|
|Gibraltar||Not legal tender||Legal, must register with the GFSC||Regulated|
|Luxembourg||Not legal tender||Legal, must register with the CSSF||Regulated|
|Canada||Not legal tender; some retailers accept as payment||Legal, regulation varies by province; final federal regulations expected late 2019||Regulated|
|Mexico||Legal, accepted as payment in some contexts||Grey area; first crypto exchange in opened mid 2019||Regulated|
|Lithuania||Not legal tender||Legal, must register with the Lithuanian Finance Ministry||Grey area|
|United States||Not legal tender; some retailers accept as payment||Legal, regulation varies by state; SEC expected to publish updated crypto regulations late 2019||Grey area|
|UK||Not legal tender; considered assets||Legal, registration requirements with FCA||Grey area|
|Russia||Not legal tender||Grey area; regulations to be determined by the end of 2019||Grey area|
|Japan||Legal; treated as property||Legal, must register with the Financial Services Agency||Grey area|
|Nigeria||Legal||Grey area; regulations upcoming from Central Bank of Nigeria||Grey area|
|Singapore||Not legal tender||Legal, no registration required||Grey area|
|South Korea||Not legal tender||Legal and regulated, must register with FSS||Banned|
|India||Not legal tender; digital rupee may be in the works||Effectively illegal, but global and federal regulations being considered||Banned|
|China||Bitcoin considered property; all other cryptocurrencies banned||Illegal, but a global regulatory framework being considered||Banned|
Japan has one of the most progressive regulatory climates for cryptocurrencies, widely considering bitcoin as legal tender and passing a law in mid-2017 recognizing cryptocurrencies as legal property. In late 2018, Japan also approved self-regulation for the crypto industry.
By contrast, China currently has one of the most restrictive environments in the world for cryptocurrency. China banned bitcoin transactions in 2013, as well as ICOs and crypto exchanges in 2017─though many have found workarounds through sites not yet firewalled.
Cryptocurrency and exchange regulations in the EU are determined by individual member states, and are considered legal across the bloc.
Digital currency offers great promise, through its ability to reach people and businesses in remote and marginalized regions.
—Christine Lagarde, Managing Director of IMF
Perhaps unsurprisingly, Switzerland has one of the most open climates for cryptocurrencies and exchanges in Europe. In 2016, the city of Zug, known as “Crypto Valley”, started accepting bitcoin as payment for city fees. Swiss Economics Minister Johann Schneider-Ammann announced his goal in 2018 to make Switzerland the world’s first “crypto-nation”.
Both Canada and the U.S. take a similar approach to cryptocurrency legislation at the federal level, as both countries view cryptocurrencies as securities. However, provincial and state regulations differ widely in their taxation requirements of profits from crypto investments.
Regulations throughout Latin and South America run the full legislative spectrum.
- Bolivia: unilateral ban on cryptocurrencies and exchanges
- Ecuador: the first country to launch its own token; ban on all cryptocurrencies aside from its government-issued SDE token (Sistema de Dinero Electrónico = electronic money system)
- Mexico, Argentina, Brazil, Chile: cryptocurrencies widely accepted as payment
- Venezuela: cryptocurrencies widely accepted; this makes sense, considering the economic crisis and subsequent freefall of the bolívar
The Importance of Cryptocurrency Regulations
Cryptocurrency’s journey is the story of a technology rapidly outpacing the laws that govern it.
Governments around the world are keenly aware of this problem. Members of the G20 published a request in June 2019 for a global regulatory framework for cryptocurrencies to be implemented to better manage the benefits and challenges that cryptocurrencies bring.
Regulation for both cryptocurrencies and crypto exchanges is essential for the future of digital finance─bringing legitimacy to the digital financial market, and making it more attractive for new businesses, established banks, and investors worldwide to more easily conduct business within this emerging ecosystem.
Mapping the Major Bitcoin Forks
Bitcoin forks play a key role in Bitcoin’s evolution as a blockchain. While some have sparked controversy, most Bitcoin forks have been a sign of growth.
Mapping the Major Bitcoin Forks
The emergence of Bitcoin took the world by storm through its simplicity and innovation. Yet, plenty of confusion remains around the term itself.
The Bitcoin blockchain—not to be confused with the bitcoin cryptocurrency—involves a vast global network of computers operating on the same distributed database to process massive volumes of data every second.
These transactions tell the network how to alter this distributed database in real-time, which makes it crucial for everyone to agree on how these changes should be applied. When the community can’t come to a mutual agreement on what changes, or when such rule changes should take effect, it results in a blockchain fork.
Today’s unique subway-style map by Bitcoin Magazine shows the dramatic and major forks that have occurred for Bitcoin. But what exactly is a Blockchain fork?
Types of Blockchain Forks
Forks are common practice in the software industry and happen for one of two reasons:
- Split consensus within the community
These forks are generally disregarded by the community because they are temporary, except in extreme cases. The longer of the two chains is used to continue building the blockchain.
- Changes to the underlying rules of the blockchain
A permanent fork which requires an upgrade to the current software in order to continue participating in the network.
There are four major types of forks that can occur:
1. Soft Forks
Soft forks are like gradual software upgrades—bug fixes, security checks, and new features—for those that upgrade right away.
These forks are “backwards compatible” with the older software; users who haven’t upgraded still have access to the network but may not be able to use all functionality in the current version.
2. Hard Forks
Hard forks are like a new OS release—upgrading is mandatory to continue using the software. Because of this, hard forks aren’t compatible with older versions of the network.
Hard forks are a permanent division of the blockchain. As long as enough people support both chains, however, they will both continue to exist.
The three types of hard forks are:
Scheduled upgrades to the network, giving users a chance to prepare. These forks typically involve abandoning the old chain.
Caused by disagreements in the community, forming a new chain. This usually involves major changes to the code.
- Spin-off Coins
Changes to Bitcoin’s code that create new coins. Litecoin is an example of this—key changes included reducing mining time from 10 minutes to 2.5 minutes, and increasing the coin supply from 21 million to 84 million.
3. Codebase Forks
Codebase forks copy the Bitcoin code, allowing developers to make minor tweaks without having to develop the entire blockchain code from scratch. Codebase forks can create a new cryptocurrency or cause unintentional blockchain forks.
4. Blockchain Forks
Blockchain forks involve branching or splitting a blockchain’s whole transaction history. Outcomes range from “orphan” blocks to new cryptocurrencies.
Splitting off the Bitcoin network to form a new currency is much like a religious schism—while most of the characteristics and history are preserved, a fork causes the new network to develop a distinct identity.
Summarizing Major Bitcoin Forks
Descriptions of major forks that have occurred in the Bitcoin blockchain:
- Bitcoin / Bitcoin Core
The first iteration of Bitcoin was launched by Satoshi Nakamoto in 2009. Future generations of Bitcoin (aka Bitcoin 0.1.0) were renamed Bitcoin Core, or Bitcore, as other blockchains and codebases formed.
A codebase fork of Bitcoin. Developers released a hard fork protocol called Segwit2x, with the intention of having all Bitcoin users eventually migrate to the Segwit2x protocol. However, it failed to gain traction and is now considered defunct.
- Bitcoin ABC
Also a codebase fork of Bitcoin, Bitcoin ABC was intentionally designed to be incompatible with all Bitcoin iterations at some point. ABC branched off to form Bitcoin Cash in 2017.
- Bitcoin Gold, Bitcoin Diamond, Other Fork Coins
After the successful yet contentious launch of Bitcoin Cash, other fork coins began to emerge. Unlike the disagreement surrounding Bitcoin Cash, most were simply regarded as a way to create new coins.
Some of the above forks were largely driven by ideology (BTC1), some because of mixed consensus on which direction to take a hard fork (Bitcoin ABC), while others were mainly profit-driven (Bitcoin Clashic)—or a mix of all three.
Where’s the Next Fork in the Road?
Forks are considered an inevitability in the blockchain community. Many believe that forks help ensure that everyone involved—developers, miners, and investors—all have a say when disagreements occur.
Bitcoin has seen its fair share of ups and downs. Crypto investors should be aware that Bitcoin, as both a protocol and a currency, is complex and always evolving. Even among experts, there is disagreement on what constitutes a soft or hard fork, and how certain geopolitical events have played a role in Bitcoin’s evolution.
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