Upside and downside to online virtual currency

By now you’re probably aware of Bitcoin either first hand or from the media, and to be expected there’s an upside and downside to the online virtual currency phenomenon. This is understandable given human nature that freely and incessantly “expresses” itself via the internet.

The good news is that Gartner analysts’ view of the cryptocurrency has now moved beyond what it describes as the “hype cycle” that practically all technology appears to go through. Also, over 400 European banks are joining major retailers by directly allowing Bitcoin purchases.

So, gradually, Bitcoin adopters are jumping on board what is a still relatively new money source and service via the net – launched in the wake of, and in response to, the 2008 global financial crisis and failing capital markets.

However, negative connotations persist through illegal Bitcoin activity thriving on the internet’s dark (web) side with the latest report of a £12 million theft of the cyber currency not helping matters.

So why bother with Bitcoin?

One answer is due to BlockChain. according to Scots senior technologist Peter Ferry, co-founder and commercial director of start-up Wallet Services out of Edinburgh’s CodeBase creative hub.

BlockChain is a new class of software program that represents Bitcoin’s underlying technology enabling us to transfer and track assets – including Bitcoin virtual currency – across open unsecure networks: “We’re talking of anything represented digitally like music, a passport, real estate ownership, even a social benefit application.”

BlockChains prove ownership, actions and contracts as a public record. Their talent is to enable co-operation without the middleman – ie intermediaries like Facebook, AirBnB and countless others who share our personal and transactional details with other organisations.

The system improves transparency by recording transactions as an unchangeable public record that you cannot subvert or disprove. It also provides control over this data and its use staying with the end user.

“This is unlike the market-maker centralised date-collecting business models existing within governments and banks since the dawn of civilisation, and continued with the advent of the dot-com boom.”

BlockChain technology is in its infancy, in the same way that the World Wide Web was in 1995, and Ferry claims current excitement is driven by a dawning realisation amongst techies, entrepreneurs and corporations that it might just have the same profound impact on business and society.

Industry pundits reckon there exist a few thousand BlockChain developers in the world today and he admits that the BlockChain concept is not easy to grasp. Ferry’s enterprise is based on building an ambitious software platform he promises will bring innovation to the marketplace.

“We’re in an advanced stage of developing a software toolkit that enables mortal developers and business analysts to rapidly model and build BlockChain capabilities into their own apps to simultaneously reduce risk and investment for companies and governments.”

The Scottish Government appears to agree: it has awarded the start-up a contract to investigate use of Civic BlockChain for inter-government agency and citizen interaction. Ferry and his two co-founding directors represent seasoned Microsoft Corporation alumni plus an executive who has successfully sold-on tech startups.

They’re committed to building a global business placing Scotland at the forefront of the BlockChain revolution to enable economic and social benefit through BlockChain approaches and Ferry and his colleagues are busy travelling the country to explain out its virtues.

Bill Magee
Journalist & Technology Writer