Research Paper about Blockchain Technology

Blockchain is the technology that enables the existence of cryptocurrencies like Bitcoin, Ethereum, XRP, etc. A cryptocurrency is a medium of exchange, created and stored electronically in the blockchain using encryption techniques to control the creation of monetary units and to verify the transfer of funds. In other words, we can transact digital money or cryptocurrencies to other peers without the use of an intermediary or a third party. The technology itself is very fascinating because these cryptocurrencies have no intrinsic value, no physical form, and their supply is not determined by centralized organizations such as a bank, which means the whole system itself is decentralized. There are benefits and disadvantages of using cryptocurrencies, however. According to PwC, the benefits of blockchain are increased transparency, accurate tracking, permanent ledger, and cost reduction. The downsides or the unknowns of blockchain are the complexity of the technology, regulatory implications with the government, implementation challenges, and the wide competition amongst platforms. Given the rise of blockchain and cryptocurrencies over the last few years, there are certainly potential applications we can use from our day-to-day lives. With the use of blockchain and cryptocurrency, there is a potential enhancement of the automotive industry, where consumers could use the blockchain to manage fractional autonomous cars. With our financial services, there will be cheaper and faster settlements that could save us billions of dollars from transaction costs while improving transparency. With the upcoming elections and such, using a blockchain code, voters could cast votes via smartphone, tablet, or computer, resulting in quick and verifiable results. And lastly, with healthcare, patients’ encrypted health information could be shared with different providers all over the world without the risk of privacy breaches. 

There are certainly a lot of ethics and implications on blockchain technology itself. However, every day the blockchain technology gets better exposure to the world especially cryptocurrencies like Bitcoin and Ethereum. The growth of blockchain and cryptocurrencies have massively grown over the last few years and could not simply ignore the fact that this could change how we perceive our financial system. But before we can fully use cryptocurrencies, we have to understand that there are certainly ethical considerations and applications that need to be known. With the use of cryptocurrencies, how can we assure that our expectations are met in terms of privacy, security, efficiency, and integrity of the system? Another ethical issue of blockchain is the overhype itself with the technology with no promises. A lot of blockchain advocates announce certain “breakthroughs” within their cryptocurrencies with a bunch of promises and hype, but in the end, there was no certainty that the technology itself is close to completion. Peer pressure from the community, money, and ego are the contributing factors to the tendency for the “breakthrough:” to claim more than can be delivered. I believe blockchain technology and cryptocurrencies could potentially be the next “big thing” that would ever happen in our lifetime. 

When it comes to cryptocurrencies, there are certainly some drawbacks when people hear the word “Bitcoin”. A lot of their arguments with Bitcoin are the use of cryptocurrencies is used for kidnappers and extortionists, etc. These could raise some ethical implications because it is indeed true that a lot of kidnappers and extortionists use cryptocurrencies like Bitcoin as payment so no one could track the transaction even the government itself. There have been a lot of debates about whether the government should step in and regulate cryptocurrencies. Also, for years now, a lot of big banks are very against the use of cryptocurrencies. One study shows that if the majority of consumers start to use cryptocurrencies as their means of living, this could potentially bring down a lot of big banks because nobody wants to use the banking system anymore. With cryptocurrencies, the way we transact with other people is efficient and reliable rather than having a third party like a bank process the whole transaction. This also potentially could raise ethical issues such as if big banks do not exist anymore, a lot of people could potentially lose their jobs. We live in a society that our ever technology evolves from one decade to another. This could be a futuristic point of view that no one will ever use banks anymore soon. Depending on the person, this could potentially be a good or bad thing. 

Over the last few years, a lot of cryptocurrency exchanges have been in the market lately like Coinbase, Gemini, and Robinhood. These platforms offer the trade of cryptocurrencies and could potentially make money from these platforms. About a month ago, Poly Network, a so-called decentralized project, was hit with a major attack where hackers made more than $600 million worth of cryptocurrencies. With all the talks and promises about the blockchain is very secure and un-hackable, there are still some circumstances that the cryptocurrencies you own could still be potentially hacked and stolen. That is why another ethical implication has been raised here. These blockchain advocates tell people that the network is secure and protected, but there will always be news about a certain network being hacked. After doing a whole lot of research about blockchain technology and cryptocurrencies, for these promises of security to happen, the cryptocurrencies you own should be put in a hard wallet where you only have access to it, and no one else can. The adoption of blockchain technology and cryptocurrencies seems to be complicated than it seems to be. Another ethical implication about this adoption is that not a lot of people could afford to buy a hard wallet and store their cryptocurrencies there. So, in the end, how do we have that sense of security of our funds and cryptocurrencies if we do not own a hard wallet? 

In conclusion, I believe that there will be a potential growth of blockchain technology and cryptocurrencies like Bitcoin in the next few years. A lot of adoption of Bitcoin has been happening lately around the world like El Salvador, where they announced that their currency now is Bitcoin. They have certainly thought about this process, and they have decided its benefits exceed the disadvantages. A lot of ethical implications need to be questioned and answered at the right place and right time.

References

PricewaterhouseCoopers. (n.d.). Making sense of bitcoin, cryptocurrency and Blockchain. PwC. Retrieved October 7, 2021, from https://www.pwc.com/us/en/industries/financial-services/fintech/bitcoin-blockchain-cryptocurrency.html. 

2019, S. L. 16 M. A. R., Longstaff, S., Simon LongstaffAfter studying law in Sydney and teaching in Tasmania, Longstaff, S., After studying law in Sydney and teaching in Tasmania, & *, N. (n.d.). Blockchain: Some ethical considerations. THE ETHICS CENTRE. Retrieved October 7, 2021, from https://ethics.org.au/blockchain-some-considerations/. 

Orcutt, M. (2020, April 2). Why it's time to start talking about Blockchain ethics. MIT Technology Review. Retrieved October 7, 2021, from https://www.technologyreview.com/2019/10/10/132652/why-its-time-to-start-talking-about-blockchain-ethics/.