Luis Solano

The Merge Between Blockchain and Technology With Humans

Introduction

In 2021, the blockchain world gained traction. In this same year, cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and other altcoins entered a bull market and reached [1]. A [2] is defined as a time where the price of a stock, currency, or other commodity continually rises in price. This is in contrast to a bear market, where quite the opposite happens. The price of a stock, or other, drops lower throughout time. Social media, news channels, and other outlets covered the blockchain world extensively. There was a previous time where the same thing happened, but on a smaller scale although still noticeable. This year was in , where Bitcoin reached a price of nearly $20,000, but then entered a bearish market, and the attention it received dwindled throughout the coming months. After this, the price of Bitcoin consolidated at about $3,000 per Bitcoin. Blockchain technology is not only cryptocurrencies, but the technology behind them and the way in which the technology can be utilized. Due to the coverage that comes with bull markets and cryptocurrencies such as Bitcoin and Ethereum, many companies have begun researching what kind of technology they can offer and how they can incorporate blockchain technology. Many have considered headsets, glasses, and NFTs to name a few. Since the early 2020s, this has been on the radar of many since. With this, many people have also been exposed to the blockchain world.

The Blockchain Network

[4] can be thought of as data packages made up of blocks. These blocks essentially have multiple transactions in the blockchain world associated with them. For the blockchain network to keep track of these transactions and verify that they are valid, timestamps and a hash number are associated with them. This serves as a way to make sure that there are no faulty, or fraudulent transactions. If there was a change made to the block, the [5]. Because the blockchain does a great job at verifying transactions and keeping track of them, the reliability of transactions can allow for different uses such as [6]. The main incentive to use blockchain networks is because it works from peer-to-peer instead of having a centralized layout, where one entity can regulate what gets verified and sent. An example of centralization can be a bank, where a bank controls the money and offers some benefits to the customers if they meet a criteria. Because blockchain is peer-to-peer, this third party entity is not required to conduct transactions. With [7], blockchain becomes a candidate for reliable data transactions. The topics that will be covered in the following paragraphs revolve around, “what problems come with adopting such technologies?”.

• Blockchain workflow.png

  This is a visualization of how blockchain technology works. It shows main steps from the beginning to the end along with notes of value.

Privacy Concerns

One thing that is crucial to note with blockchain networks is that, because everything is tracked and verified, a lot of [8] . For example, when sending or receiving a transaction for a specific user’s wallet address, it is available for the public to see. The reason for this is because a transaction leaves a digital footprint, where a “receipt” can be viewed by anybody. With this, many can associate the size of a purchase or contents of some data, which can be a security or privacy concern for that user. Examples of this have already risen as public figures. A notable example is people [9] from ethereum founder, Vitalik Buterin. This could make it difficult to keep privacy on transactions, and could potentially be a security issue if the data is confidential or sensitive. There are ways to make sure data is not leaked, but it requires some more expertise and knowledge. Since it is also peer-to-peer, a 3rd party does not have to be involved, which decreases the [10] in that sense in contrast to potentially using a bad third party service. This technology can be utilized in a variety of ways. For instance, [11] are the same thing, but they require a set of requirements to be met before the transaction can occur. This serves as a quick way to ensure an exchange is made satisfying both parties. It also makes it cheaper to ensure that this transaction is carried out as planned, minimizing potential fees and risks.

Big Technology Companies

Companies such as [12], a hint to the word “Metaverse”, meaning a network of virtual worlds that people can access via the use of technology. Similarly, Square also renamed, where they are now known as Block, a move to be known as a company of many things, including crypto. A lot of other companies have also kept their eye on virtual reality and blockchain technology as well. For example, companies such as Roblox, Sandbox, Disney, Decentraland and many others have started to emphasize their interests in the metaverse and have begun efforts to provide utilization in this realm. There has been overall mention of “Web 3.0”, which would revolve around blockchain technology and more. An era where the human can merge with technology and carry on with their responsibilities or pleasures. Web 3.0 aims to incorporate technology with the human body to provide new experiences. This could involve technology to feel sensations, virtually meet others, and even potential technology like smart eye contacts.

NFTs and Barrier To Entry

Technology is constantly being innovated. Whether it progresses quickly or at a slower pace. With the development of blockchain, emphasis on Web 3.0, and interests in decentralization, we have to consider the issues that may arise and not just the benefits. A popular use of blockchain smart contracts nowadays are used for NFTS. NFTs, or non-fungible tokens, are widely created and exchanged on the Ethereum network. More specifically, they use the [13] standard, which comes with functionality commonly used for NFTs. By using this, ownership of a digital item can be allocated and marked uniquely, where there can only be one real owner per token. There other networks such as Solano where NFTs can also be minted or exchanged. Anybody who has the knowledge of smart contract building and necessary capital can create an NFT and place it for sale on the market. To create an NFT on a network, a fee is often placed to use the smart contract. For example, in the ethereum network, the fee is known as [14] which requires a specific amount of ethereum to complete a transaction based on the traffic of the network at that time. Since 2021, there has been an increase of thousands of NFT projects aiming to be the next one that sells for millions. To stand out from other projects, there is extensive marketing and an emphasis on what utilities the project can provide. One example of utilities being provided is by giving an owner of an NFT collection exclusive access to masterminds, networks, business partners, and even elite parties. By continually growing popularity, the price also grows. Additionally, a project may have limited editions of such NFTs, which brings in the low relative supply for an increased demand. Due to there only being one unique owner per NFT, along with the value or use that comes with them, NFTs can be sold for millions of dollars, far out of the reach of millions of people. Giving an unfair advantage to those who do not have access to such funds, only the rich will continue to get benefits to potentially get more rich. NFTs are still relatively new to millions of people who were not exposed to this prior to the increase in demand. It is hard for people that have recently been introduced to this technology to differentiate legitimate projects from those made by scammers. Not only is there a learning curve to knowing how to buy an NFT, but multiple steps are required to even be able to do so. A user looking to buy an NFT would need to know how to find a real project, create a cryptocurrency wallet, buy the necessary currency, connect their wallet to an official website, and know how to use gas fees to ensure their transaction goes through successfully. Being a lot for a new user, there is a lot of unreliable and outdated information online that could further confuse people. A question to ask about decentralization is, “is everyone on their own?”. The resources for people to learn about such technology and markets are still very relatively scarce. Overall, NFTs bring the potential problem of marginalizing certain demographics, communities, and also have a barrier and gap to entry.

Environmental Implications

With this technology, the concern of widely used technology brings in the immediate question of “how sustainable is blockchain?”. For instance, Bitcoin was recently scrutinized by many with regards to its [15]. Due to mining being an active part of such cryptocurrencies, the use of hardware and electricity are also heavily required. Now, looking at the many other cryptocurrencies and technology all together,it makes sense to wonder how this could impact the environment and how this could be addressed. In El Salvador, a recently adopted “Bitcoin City” plans to minimize such environmental stress by using a non-active volcano to serve as a source of energy. With this, plans to maintain crypto and blockchain technology in a more sustainable manner is one example of how things could be changed. Many major mining companies have yet to deal with this. With Web 3.0 on the horizon, the use of technology, use of toxic metals to wildlife, and overall e-waste is a valid concern. Devices have a certain lifespan and with people mishandling them or dropping them, they can get damaged or stop functioning where they can potentially be salvaged or go to waste. The environmental impact of mobile phones, PCs, TVs, to name a few, have not gone unnoticed as covered by Brett H. Robinson, in his [16].

References

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Luis Solano