Blockchain Technology:
What is it, how is it being used and where is it headed?
University of Houston Clear Lake
Marketing 3351.01
March 27, 2019
Blockchain Technology:
What is it, how is it being used and where is it headed?
In this research essay I will attempt to explain blockchain technology using four basic questions:
What is blockchain? How is blockchain being used? And, where is it headed? This paper will include
findings from both academic and media articles covering the topic from both points of view in order gain
a better understanding of how blockchain technology is impacting the present and how it will impact the
future. As the history is blockchain is a short one this essay with begin there and expand upon it into all
facets of modern life.
In an article written by Vinya Gupta in 2017 for Harvard Business (Gupta, 2017), Gupta writes a
brief history of blockchain technology in which he outlines five essential events in the software’s life thus
far that have propelled it into the realm of the known. First of which was the creation and release of
bitcoin in 2009. The release of bitcoin is an anomaly to most of the world since as of yet its creator has
never been named, rather, no one knows their real name. Instead it is speculated that a group of
programmers was responsible publishing under a shared name Satoshi Nakamoto. The first block of the
chain was mined with a date and message reading, “The Times 03/Jan/2009 Chancellor on brink of
second bailout for banks.” Today the total bitcoin market cap “hovers between $10 – $20 billion dollars.”
(Oleinic, 2017)
The second event Gupta mentions is the recognition of the driving software behind bitcoin, the
blockchain itself. Specifically the realization among financial institutions and corporations could use this
technology to great effect. Blockchain gives transactions more validity thanks to the innovative ledger
system that allows other members of the chain to check the authenticity of the information that is being
transacted. This makes committing fraud on the currency bitcoin essentially impossible. The ability to add
this level of security on financial transactions could possibly lead to a revolution in banking. An article
written in Fortune by Lucinda Shen in 2016 states that “15% of banks worldwide expect to widely
implement blockchain by [2017].” (Shen, 2019)
The next event mentioned is the “’smart contract’” (Gupta ,2017) that was in the next generation
of blockchain currency called ethereum. Ethermeum would make it possible for financial institutions to
utilize blockchain for things such as loans and bonds to be represented in the chain rather than just
currency transactions. While bitcoin utilized a basic system of smart contract with its ledgers, ethereum
would expand on this idea. The ethereum model of smart contract would allow developers to add on to
the existing contract, or what the ethereum developers would call “autonomous agents”, which would
allow more complex forms for financial transactions. With these new innovations to the blockchain code
financial institutions will be able to issue bonds, loans, and provide more monetary utility to blockchain
currencies. As of April 29th, 2019 the market cap on the ethereum crypto currency is at roughly $16
billion. (CoinMarketCap. 2017)
The fourth, and more recent innovation, in the blockchain anthology is “proof of stake”. (Gupta,
2017) Before proof of stake a network of “miners” would use vast amounts of computing power in order
