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Paying Or Gambling? – The Bitcoin Dilemma

Bitcoin is only conditionally suitable for payment as a currency thought, but above all used for speculation: The Bitcoin soaring is the original purpose of the crypto field now in the way. The hype raises the question of whether the digital object of desire is even good for payment. Speculative object “I can not remember when the last customer paid with Bitcoin,” says Niels Göttsch. The owner of a coffee bar in Berlin, Germany, is by far not the only shop operator that is so. Although Bitcoin is establishing itself in the financial world, this success leads to a dilemma.

For what was supposed to be a digital currency threatens to become a purely speculative object.

For payment Bitcoin is therefore only conditionally. For business owners and online retailers, extreme price swings are uncomfortable – prices must be constantly adjusted. And who wants to spend money that has no stable value and rather to the speculation on price gains invites? “What we want from a monetary system is not that it makes people rich who hoard money,” said US economist Paul Krugman once. “We want it to be used for transactions and make the economy as a whole rich.”

But that’s not the case for Bitcoin, whose value has risen from around 1,000 to over $ 20,000 (€ 16,864.8) since the beginning of the year. Is digital money still good as a means of payment or just for gambling? Hardly any payments In Berlin, where for years more and more hip cafes and start-ups offer Bitcoin payments, the problem is already noticeable. At least there were at least ten Bitcoin payments per year, says coffee bar owner Göttsch. In the meantime, however, the transactions have dried up completely. “The staff already forget how it works with the Bitcoin assumption.”

Further Rejections Of Bitcoin Payments

Also, the Berlin pastry Engelmann gets lately no more Bitcoin requests. There have always been problems, says owner Michael Engelmann. For example, customers accidentally transferred the money twice because they were not sure that the transaction actually took place. For a while, Bitcoin also appeared on the rise as a means of payment. Review of 2014 In the US, major corporations such as Dell, Expedia or Microsoft introduced the crypto-vise as a payment option.

Also Ebay publicly flirted with this step. At the time, the course did not make such a big jump and at times even suffered so much that there were serious doubts about the future of Bitcoin – but its spread in everyday life has been steadily increasing.

In the trendy New York West Village, the city’s first ATM was set up, where Bitcoin could be bought with dollars. On Wall Street opened the Bitcoin Center, an information and lobby headquarters of the young start-up industry around the 2009 introduced digital money. And not only in the windows of trendy shops, bars and restaurants appeared more often the sticker with the words “Bitcoin accepted here” on.

Around four years later, the Bitcoin hype reaches new dimensions, but an on-site search reveals: The West Village shop is gone, the Bitcoin Center is closed. “We just could not afford the rent anymore,” says founder Nick Spanos. In poor times, people sacrificed a lot of Bitcoin to keep it running, but at some point it became too expensive. Others benefited from the price rally. Spanos continues to lobby for Bitcoin, but now operates only a small office outside the financial district. After all: The Bitcoin ATM is still there. He is now at a brokerage office in the basement.

“We have nothing to do with it,” says Spanos. What about the big companies that made headlines back then? Computer giant Dell has long abolished Bitcoin payments because of “low demand”. On Ebay you are wrapped in Bitcoin plans in silence, even ex-daughter Paypal is no information on crypto-experiments. Microsoft and the “Time” publisher also do not want to comment on their experiences with Bitcoin.

The online travel agency Expedia still accepts Bitcoin – but still only with hotel bookings on the US website. At the start of more than three years ago, it had been said that the offer would be extended if it was well received by customers. According to a spokeswoman, the transaction volume has doubled in the past ten months after all. However, she did not want to give concrete numbers.

In early December, even the online computer game retailer Steam was forced, despite its cyber-enthusiastic clientele to stop the Bitcoin acceptance. The fees had risen rapidly – from initially 20 cents per transaction to last almost $ 20. Added to this are the enormous value fluctuations. “If the transaction was not completed on time, the required amount for the payment may change,” it says at the online retailer. Then additional payments are necessary; and again a transaction fee is due.

Nevertheless positive conclusion Bitpay, the leading Bitcoin payment processor, nevertheless concludes positively for 2017. “Those who do not live under one stone will have seen that the daily transaction level reached new highs this year,” the company from Atlanta says. For the first time, payments of more than $ 1 billion were made, and growth was 330 percent for the year. That sounds strong, but pales in relation to the bitcoin price hike, which peaked at over 2,000 percent over the same period. Also measured on the entire e-commerce market, the payment volume is rather modest.

By comparison, on the Cyber ​​Monday discount battle alone, more than $ 6 billion was spent on the Internet on a single day and only in the US. The Bitcoin community is well aware that capturing by speculators may hurt their goal of a free currency that could once rival the dollar or the euro. Last but not least, to facilitate transactions and to counter the gambling, was split off in August after long struggles in the community of Bitcoin Cash from Bitcoin. Since then, the course has exploded here as well.

And the Coinbase trading platform’s attempt to absorb Bitcoin Cash has only led to further turbulence – the hype surrounding crypto money just seems too big to keep out speculators. So the Bitcoin-friendly dealers show nothing but optimism. Although the offered Bitcoin payment is hardly used. But go from increasing interest.

At least from a marketing point of view, the effort has already been worth it anyway: He has made Mymoria the first “digital funeral home” nationwide in the headlines – with the dream of Bitcoin friends of independent cyber money, however, has as little to do as the dizzying Bitcoin speculation in the financial markets.

Four Reasons Why Bitcoin Is Unique

Many investors panic or even suspect the Bitcoin crash, but Jimmy Song (Bitcoin developer) published an explanation via the platform medium why Bitcoin is exceptional and how investors can assess its long-term value.

How can one coin be distinguished from another? More importantly, how should an investor know how high the long-term value of a coin will be?

Bitcoin Developer and Entrepreneur Jimmy Song

The questions he asks are important for investors right now. He answers investors’ questions by pointing out how Bitcoin differs from other coins.

“The Greatest Innovation Has Already Occurred”

Any new coin, ICO or hardfork is described as innovative or in response to a problem that Bitcoin cannot handle in the hope that Bitcoin will be banned for lack of a “feature”.

What is overlooked is that the biggest innovation is already there. Decentralized digital scarcity is the real innovation. The “features” and innovations of the so called rivals of Bitcoin (Altcoins) are “really tiny variations of a huge innovation”.

Song criticizes the success rate of the ICOs and points out that many early Altcoins no longer exist. Altcoins and ICOs perform many different functions, but most are not useful or are not accepted.

Bitcoin’s Decentralization

“When it comes to decentralization, nothing beats Bitcoin,” says Jimmy Song. Every other cryptocurrency that came to Bitcoin has a founder or company and these have a great influence on their coins. Building on this, one could argue – like Song – that ICOs and other altcoins are much more centralized than one actually wants to admit.

Take the ICOs, for example. The company that publishes the ICO becomes the “central party” and can:

  • Create token
  • Change the use of the tokens
  • Issue additional tokens

It sounds like government control over Fiat currencies – because it is.

Altcoins have the same central characteristics, albeit to a lesser extent, because they have a founder who can control the coin in the same way a government controls a paper currency.

Bitcoin is different. When Satoshi Nakomoto disappeared, he left behind “users of different affiliations,” who all have a say in how the Bitcoin network operates.

The Network Effect

Bitcoin already has the largest network and benefits from it. As popularity increases, this is only getting bigger and bigger, while Altcoins and ICOs have to try to keep up. The network and infrastructure around Bitcoin is growing steadily.

“Bitcoin, has the largest bug bounty in the world to uncover vulnerabilities. Bitcoin has proven its safety with the only factor that is actually relevant in a test: time.”

Bitcoin Is The True Revolution

Jimmy concludes that market capitalization is heavily manipulated and Bitcoin’s own market dominance is distorted and markets are inherently volatile and can only smooth out over a long period of time.

He also recognizes that it would be too optimistic to assume that bitcoin could not be ousted, but that it will be incredibly difficult to create another truly decentralized currency. Song believes it takes an innovation at least as big as Bitcoin, or a mistake that makes Bitcoin unsustainable.

Bitcoin will continue to be different, because unlike centralized coins, it is market-driven, unchangeable and unseizable. These are the properties of a large value memory and that is bitcoin.

These 7 Cryptocurrencies Will Be Interesting In 2018

After the legendary price explosion of Bitcoin, many speculators are now afraid to jump on the bandwagon. A reason to take a look at the second and third crypto-taler generation.

2017 will go down in history as the year of crypto currencies. The Bitcoin in particular caused a sensation: With an increase in value of over 2,000 percent in 2017, it made all tried and tested asset classes look old. Against this background, cynics have been talking for a long time about a massive bubble, a fad or even fraud. Currently, however, there is much to suggest that the crypto bulls will remain at the helm in 2018.

Cryptocurrency Hype likely to continue

Investors’ fear of missing something and not participating in the crypto hype could further fuel the digital currency rally. For speculators, the focus is not only on the smaller siblings of Bitcoin such as Bitcoin Gold and Bitcoin Cash, but also currencies such as Litecoin, Monero, Ripple , Neo, Cardano, and IOTA. According to George Tung, co-founder of Cryptos R Us, it is not unlikely that one day one of these currencies will overtake the bitcoin. In his opinion, another digital currency could well be at the top in the next three to five years.

Interesting Altcoins in 2018

All digital currencies combined currently have a market capitalization of more than 745 billion US dollars. The bitcoin, which is currently still regarded as the dominant crypto currency, currently has a market capitalization of around 249 billion US dollars.

As a result, Bitcoin currently still receives almost half of the money invested in digital currencies. In the event of a fundamental paradigm shift, which would be accompanied by shifts to other coins, the following currencies could benefit:


Cardano, a crypto-taler that is also still relatively unknown, has a market capitalization of 30.9 billion US dollars despite its low level of awareness. The Cardano blockchain was introduced a few months ago and recorded massive profits from November 2017. There are currently around 26 billion coins in circulation. The maximum number of units is capped at 45 billion.


The currently rather unknown Monero has a market capitalization of around 6 billion US dollars. Similar to Bitcoin, the inventor of Monero is anonymous. Anonymity is a top priority at Monero, so the details of each transaction are given exclusively to sender and recipient. Accordingly, the currency is considered ideal for cyber criminals. Thus, the hackers behind the global WannaCry malware for Microsoft Windows also demanded ransom payments in the form of Monero. Currently there are about 15.5 million coins of anonymous money in circulation. If you want to know how to mine Monero on your phone, check out this website.


The relatively new crypto currency AntShares was renamed NEO or NEO Coin at the beginning of August. Among crypto insiders, NEO is also known as the Chinese Ethereum. The coin has a current market capitalization of more than 6 billion US dollars. To counter the growing scepticism about digital currencies, NEO founder Da Hongfei recently said in a CNBC interview: “I would say there is a bubble in this industry, but it’s okay”. NEO’s current circulation offer is 65 million out of a total of 100 million coins.


Among others, programming pioneer John McAfee recently named the so far unpopular Verge as “best buy” among the current crypto currencies alongside Monero. The cryptocoin now has a market capitalization of around 2.3 billion US dollars. Out of a possible 16.555 billion, 14.4 billion verages are in circulation.

The crypto currency is not ICO-financed, but lives on thousands of members of the existing community. The Verge developer community has taken up the cause of “privacy”. Networks such as Tor are used, and the original Bitcoin blockchain technology has been improved to allow faster transactions. Multi-algorithm mining also ensures greater safety and even distribution of the verge coins among the miners.


With a current market capitalization of around 141 billion US dollars, Ripple ranks third among the largest digital currencies. The crypto talers were created by web developer Ryan Fugger, businessman Chris Larsen and programmer Jed McCaleb. The New York Times once described Ripple as “a cross between Western Union and a currency exchange without the high transaction costs”. Ripple’s circulating offer amounts to a maximum of 100 billion units. In contrast to many other digital currencies, Ripple thus provides a large number of coins.


In the current market environment, Litecoin has a market capitalization of around 12 billion US dollars. The digital currency was founded by former Google employee Charlie Lee. Lee wants Litecoin to offer a faster alternative to bitcoin. He himself said in an interview: “My vision is that people use Litecoin every day to buy things.” The maximum coin limit of Litecoin is 84 million coins, currently there are approximately 54 million coins in circulation.


The payment system, which is abbreviated with the acronym IOTA, currently has a market capitalization of around 10 billion US dollars. IOTA stands for Internet of Things and Tangle and refers above all to “Machine to Machine” communication. Perhaps today’s most innovative digital currency could establish itself at the forefront of global crypto currencies in 2018. It was developed by the entrepreneurs and mathematicians David Sønstebø, Sergey Ivancheglo, Dominik Schiener and Dr. Serguei Popov.

By eliminating long and costly transactions and mining processes, IOTA has a clear advantage over traditional digital currencies. When a user makes a transfer with IOTA, two previous transactions are automatically validated, making each IOTA owner an IOTA “miner”. Unlike first and second generation block chain technology, IOTA is based on a distributed ledger architecture called “The Tangle”, which enables three important crypto milestones to be achieved: offline transactions, zero cost transactions and infinite scalability. The maximum supply of coins is around 2.8 billion IOTA, all coins are already in circulation.

The Lightning Network

What is the Lightning Network? In this article, we try to explain how this miracle of bitcoin scalability works. Part 1 is about payment channels.

You only hear the very best of the lighting network. This concept, it is said, solves all scalability problems of bitcoin solving, improves privacy and enables instant transaction.

Yeah. That’s what they say, and it’s not wrong. But if someone promises you now to explain the Lightning Network “quite simply”, you can be sure to have a liar in front of you. Because the Lightning Network is not simple, but monkey complicated. I twisted some nodes into my brain while researching this article, and I will not get around passing these nodes on to you. But I’m trying to make it as simple as possible.

At Bitcoin Every Node Makes Its Own Soup

To understand the lighting network, we have to start with the Bitcoin network. That is, the fact that this is a broadcast network, which means that each node must receive, validate and store each transaction. There is a point to this, but it is obviously terribly ineffective.


Imagine a group of 250 people driving from Heilbronn to Antwerp and everyone using their own car. Or: a group of students has to solve 5 math problems together, and everyone calculates all five tasks. Or, another last analogy: Seven guests download the same recipe for the same asparagus soup for eight people from the chef, print it out and buy the ingredients at the same supermarket. Then they go to the host, where everyone makes their own soup in a potty, for which they divide the amount of ingredients by eight.

I could go on like this forever. But I think you understood what the problem is and why some people say: Bitcoin does not scale.

The Lighting Network’s Scalability Is Excellent

The lighting network, which is the subject of the following section, is now eliminating precisely this problem. It forms a network of payment channels that only sends a transaction from the person who sends it to the person who is to receive it.

That means, if I transfer money to Martin now, it does not have to be stored on every node in the Bitcoin network, but basically only on my and Martin’s node. This eliminates some serious weaknesses of bitcoin with a single stroke:

  • Privacy: With Bitcoin, everyone notes what everyone does. Blockchain analyses are possible and massively impair privacy. However, if everyone only reads and stores the transactions that are important to them, the blockchain reveals nothing about other people’s money.
  • Scalability: A broadcast network like Bitcoin cannot scale or is very poor at it. More participants do not make the network more effective, but only increase the overall data load. It is therefore unlikely that Bitcoin will ever be able to handle the volume of transactions that networks like VISA can handle. With Lightning this is possible without any problems.
  • Speed: A bitcoin transaction can be seen almost instantly, but is only confirmed after a few minutes to an hour. Until then, it is possible to reverse the transaction. With the lighting network, on the other hand, transactions are instantly valid.

Strong, isn’t it? The big question now is: Is that even possible? And how is that supposed to work?

That brings us to the cerebral convolutions I promised you. Let’s start with the first part:

The Payment Channels

What is a payment channel? The answer is not easy, so I must ask you to give me some concentration. You’ll understand, I promise.

To open a payment channel, you and I transfer an amount – say 0.1 bitcoin or 40 euros each – to a 2 out of 2 multi-sig address. 2-from-2 means the following: Once the bitcoins are on this address, both you and I must sign a transaction to withdraw them. It’s like a rent deposit account.

After we have transferred the bitcoins to this address, we make a payout – 0.1 bitcoin for me, 0.1 bitcoin for you – and sign it. However, we do not send them to the other Bitcoin nodes, only to us. We then modify the bitcoin transaction over and over again.

You can imagine the payment channel as if I would give you a completed bank transfer form that you can deposit at your bank at any time. Instead of redeeming it, however, we are constantly changing this referral slip. When I pay an invoice to you, I do not instruct the bank to transfer money to you, but send you a new transfer form, on which I have increased the amount. And so on.

Imagine you and I have the mentioned payment channel, into which we both deposited 0.1 Bitcoin. If you want to donate 0.0001 Bitcoin, write and sign a transaction that pays 0.0999 to you and 0.1001 to me. If I now redeem the transaction, I close the payment channel. But I can leave it open and you can donate 0.0001 Bitcoin every day for a year. At the end of the year I can close the payment channel and you get 0.0535 and I get 0.1365 bitcoin. They’ve made 365 transfers, but only one lands on the block chain.

Such payment channels may be practical if the same two parties keep making transactions. But to be really useful in the masses, we have to connect them to a network – to the lighting network. This allows me to make a donation of 5 Euro, which has arrived in my payment channel, to another payment channel route, for example to top up my account at

That’s the idea. Before we get to how the payment channels connect, we need to explain some challenges in setting up the payment channels. Because with these you understand (to some extent) why the confusing new scripts of Core Version 0.12.1 are necessary – and why the structure of payment channels is relatively complicated, but works without having to trust anyone.

Because anything else would no longer be bitcoin.

What’s the Problem?

There are two big problems why a payment channel does not work as easily as I just described. In the Lighting Network white paper, Joseph Poon and Taddeus Dryvja explain these problems and their solutions intensively.

The Hostage-Taking Problem

First, please imagine you and I opening a payment channel. Each of us transfers a bitcoin to the 2-of-2 multisig address. But before you get around to sending me a small donation, I show my true face and say: Hi, I will never close the channel, your bitcoin is locked on it forever, unless you transfer half a bitcoin to this or that address. The deposit of each party in a payment channel can be taken hostage by the other party.

How do you prevent that? Poon and Dryvja have found a clever solution. It sounds more complicated than it is, and once you understand it, it’s very simple: we first make the transaction to open the payment channel, but we don’t send it to the network or sign it. That is, everyone knows what should happen, but nobody has the necessary signatures to trigger the action. So far, the payment channel only exists as an idea.

After that, each of us, starting from this transaction, which theoretically exists, forms the transaction that will close the payment channel. In other words, the transaction with which each of us repays his or her share. If we both want to deposit 1 bitcoin, we now form the transaction to pay 1 bitcoin to each of us. This transaction is signed and exchanged, but not yet sent. Everyone is therefore able to send this transaction.

Only when each of us has the transaction (or signatures) to close the channel, do both parties sign the transaction that opens the channel and send it to the network. This means that anyone can close the channel at any time.

Result: The Bitcoins in the channel cannot be taken hostage, as either party can free them at any time. This model is not yet possible because you need the ID of the previous transaction to sign a subsequent transaction. But introducing the script command OP_Signohash with a soft fork will make this possible.

But this does not solve the second problem.

The Problem of Old Commitment Transactions

Imagine this time you donate me 200 days of bitcoins and shift the balance of our payment channel from 0.5:0.5 to 0.3:0.7. On day 201 you decide to close the payment channel. Instead of the most recent transaction, however, you use the first transaction that was signed by both of us. The result would be that each of us would receive 0.5 bitcoin and it would be as if you had never donated anything to me.

Poon and Dryvja have also solved this problem (theoretically). Unfortunately, a house number gets more complicated now. But trust me, you’ll understand that, too.

Briefly to the terms: Poon and Dryvja call the transaction that opens the payment channel – that is, the bitcoin transfers to the multi-sig address – funding transaction, and the one that closes the payment channel, commitment transaction. To change the credit in the payment channel, we write and sign new commitment transactions.

So as soon as we change our payment channel balances, several commitment transactions exist simultaneously, each with the same right to the blockchain. How can this problem be solved? How do you make sure that only the latest commitment transaction goes to the block chain?

Poon and Dryvja have developed a transaction model that punishes those who emit an older commitment transaction by losing all their credit in the payment channel. This model consists of two parts.

On the one hand you have to recognize who sent the wrong (outdated) transaction. This is relatively simple: you only need to create two distinguishable but virtually identical commitment transactions. The cryptographic framework of Bitcoin makes this possible by each party signing inputs and giving them to the other party signing the entire transaction. Imagine me signing a piece of paper that you put in a letter on which you put your signature, and vice versa. You don’t need to know the details, just the following: This results in two different transactions that do the same thing. It’ll be important a little later.

On the other hand, one must find a way to reverse “false” – that is, fraudulent transactions that violate the contract. The goal must be that only the most current transaction goes through without being revoked or causing a penalty.

This is where a script called OP_CHECKSEQUENCEVERIFY (CSV for short) comes in. This uses the sequence field of a transaction to “freeze” its output: A transaction must receive a certain number of confirmations so that its content can be output. For example, I can send you a bitcoin, but I can write in the transaction that you cannot use this bitcoin until the transaction has been confirmed for 1,000 blocks. So you put a time lock on the transaction.

It is very complicated in detail, but with OP_CSV you can create a transaction model that allows you to change transactions under certain conditions: Each party forms a two-path commit-ment transaction. First, the money is paid out to each party as agreed in the payment channel. This output is “frozen” and requires a certain number of confirmations. Second, the entire content of the payment channel is paid out to the counterparty. This output can only be triggered by the other party and only after the transaction has already been sent – but it can be paid out immediately.

So: If you close our payment channel with an outdated transaction, after which you get 0.5 and I get 0.5 bitcoins, although actually I should get 0.6 and you get 0.4, the output of this transaction only becomes valid after, say, 1000 blocks. As soon as you have sent this transaction, however, I have the possibility to withdraw the entire credit balance of the payment channel to me immediately.

This second output accordingly invalidates a commitment transaction. If you transfer 0.1 bitcoin in the payment channel, you send me not only the signed input for a new transaction, but also the information with which I can bend the previous transaction in such a way that all the credit goes to me if it is broadcast.

This means that as long as we both monitor the payment channel, we can always see if the other is sending an outdated commitment transaction and punishing it by redirecting all outputs of the transaction to us. This makes it virtually impossible to send outdated commitments and makes it a punishable attempt alone. The only associated problem is that both parties to a payment channel must occasionally be online to see if the other party is at risk of bringing an outdated commitment transaction into the blockchain.

The lighting network is therefore the concept of payment channels where we do not need to trust the other party to ensure that the latest transaction draft is the only one that will be valid.

So far, however, this has only been possible in theory. To work, you need CSV – introduced in Core 0.12.1 but not yet activated – and Segregated Witness – which completely eliminates transaction malleability.

The routing problem – the question of how the transaction drafts find their way through the channel network – has not yet been resolved. Hopefully, we will come to this in a follow-up contribution.

What Is Blockchain – And What Is So Exciting About It?

A lot is written and spoken about Blockchain these days – but often very technically, theoretically and difficult to understand. We will try to explain Blockchain to you as simply as possible.

For the sake of simplicity, we leave out everything that does not necessarily have to be and only causes confusion:

What is Blockchain anyway? The word blockchain comes from the English language and literally means simply block chain. The blockchain is first and foremost a database, i.e. a piece of software in which data is stored. The first block is the “creation block”, all other blocks are first checked and then appended chronologically behind. So far, so good.

Who invented the blockchain? The concept was invented by a gentleman with the pseudonym Satoshi Nakamoto (maybe his real name is Craig Wright, maybe not) for the virtual currency Bitcoin. Satoshi needed something like a common and public cash book for all users. It’s something like a huge Excel file, but you can only add new entries and not delete or change older ones.

Isn’t Blockchain the same as Bitcoin?

Blockchain as a theoretical and technical substructure is much more than bitcoin or other similar “crypto currencies”. Bitcoin behaves to the blockchain like the World Wide Web behaves to the Internet – a concrete application versus the whole platform.

What’s so special about Blockchain?

First, the blockchain is a distributed database. It is not on any servers, but every user has his own complete copy. Second, the block chain is forgery-proof: Each new block is connected to the previous block and contains the history in the form of its checksum (a kind of checksum). In addition, each block also contains the checksum of the entire chain.

This makes the order of the blocks unique. Thirdly, all data is stored in encrypted form. Together, this prevents (effective) corruption and manipulation. The whole network legitimizes itself mutually and becomes its own “Source of Truth” (but a bit of a programmer speaker, sorry).

What can you do with Blockchain?

In principle, transactions or information stored in a blockchain are real and unchangeable and therefore no longer need anyone to manage or authenticate them. Blockchain makes business models possible without intermediaries, for example securities trading without banks or house purchases without a notary.

“Smart Contracts” with programmed rules and functions could replace conventional contracts on paper, and musicians and other artists could exploit their digital rights in a differentiated way. The basic aim is to focus on the people involved and to enable peer-to-peer communication between them.

And what does this mean in practice?

Blockchain technology has particularly great upheaval potential for the financial sector. The topic is already being researched in a correspondingly hectic pace (of course you don’t want to miss the train and suddenly become superfluous). Overall, Blockchain promises that financial services will become faster and cheaper. Not only for customers – banks would no longer need to maintain their own central and expensive IT infrastructure either.

In other areas, development is not yet so far advanced. After all, Greece and Honduras are considering implementing their cadastres with Blockchain. In the distant future, elections may also take place somewhere in the world where, thanks to Blockchain, fraud is no longer possible.

Does Blockchain only have advantages?

Despite all the euphoria about the new, almost unlimited possibilities of the blockchain, the new technology has its weaknesses. These include in particular the (still) low individual scalability, the comparatively low data throughput, limitations in storage space, difficult to manage authorizations and last but not least the difficult integration with existing legacy systems in the company.

Today, Blockchain is above all a dream of the future – and a lot of hype. Most ideas are still undeveloped, the prospects of success can only be guessed in many industries. That’s why blockchain isn’t everywhere where it says blockchain: According to analysts, many current projects are more like “blockchain washing” similar to the attempt to sell legacy IT as “private cloud” in the early 2010s, or “blockchain tourism”, i.e. small proofs of concept outside the core systems.