Updating Blockchain And Cryptocurrency Developments
Since the emergence of blockchain and cryptocurrency, much has been about the great potential associated with these technologies. Most would agree that we have realized only a fraction of that potential, with these tools hardly utilized today. However, recent blockchain and cryptocurrency developments place these technologies on a trajectory where they may realize their full potential. This article explores a handful of blockchain and cryptocurrency developments that could push these technologies into the mainstream.
Tax Accounting For Cryptocurrency Has Arrived
One of the most challenging issues for cryptocurrency investors and traders is tracking gains and losses on their transactions. Whenever buying, selling, or spending cryptocurrency, the potential for trading gains or losses arises.
For those who engage in cryptocurrency transactions, the volume of data can overwhelm a manual or a spreadsheet-based tracking system. In situations such as these, tools such as Legible (https://legible.io) can prove invaluable. Legible and similar tools automate accounting for cryptocurrency holdings by automatically calculating gains and losses. Many of these tools can even prepare the necessary tax forms to report cryptocurrency transactions, including related gains and losses. Therefore, this class of tools helps remove recordkeeping obstacles, a big challenge related to cryptocurrency.
The Emergence Of Non-Fungible Tokens
The term “non-fungible token” (NFT) is intimidating to many. Yet, NFTs are one of the more significant blockchain and cryptocurrency developments to appear. Merriam-Webster defines NFTs as:
“a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership (as of a specific digital asset and specific rights relating to it).”
To illustrate, traditionally, when developers created a piece of art, music, or another type of collectible, they signed the object itself or an attached certificate of authenticity. The purpose of this action was to prove they created the item. Unfortunately, bad actors can forge these signatures and, in turn, pass counterfeited items as being authentic.
Using NFTs provides artists, investors, and collectors with a method for reducing this risk. If someone creates a collectible item in the form of a digital asset – a digital music recording, a digital picture, a digital sports card, to name a few examples – they could create an NFT as a means of “signing” the collectible to prove its’ authenticity. Because the NFT resides in a blockchain, and because blockchain technologies are presumptively immune from hacking, hackers cannot alter or copy the NFT. Therefore, if a collector acquires the digital asset with the NFT, they can have confidence that the collectible is an original work and not a forgery.
Using Blockchain To Track And Trace Food Shipments
An E.coli outbreak in late 2017 emphasized the challenges associated with tracking food throughout the supply chain. Because of the inefficiencies associated with traditional paper-based tracking routines, officials could not locate the specific source of the outbreak. The inability to track shipments resulted in five people dying from consuming contaminated lettuce. Further, 89 others required hospitalization.
Since then, participants in the food supply chain have worked to utilize blockchain technology to shorten the cycle time it takes to track food from farm to table. For example, Walmart developed a blockchain-based process that shortened the tracking time to 2.2 seconds using blockchain, compared to almost seven days using traditional, paper-based processes. Undoubtedly, when future outbreaks arise, similar creative uses of blockchain technology will prove beneficial in reducing the size of the epidemic and saving lives.
Still viewed by many as technologies that could benefit us in the future, the reality is that blockchain and cryptocurrency offer benefits today. Granted, the value associated with these technologies is not yet understood by most. However, the incremental gains we see with blockchain and cryptocurrency development continue to put these emerging technologies on the path to widespread adoption. Accordingly, we should all continue to monitor the evolution of blockchain and cryptocurrency and prepare ourselves to capitalize on the emerging uses of these platforms.
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