It sounds like a straightforward data point – the Bitcoin supply has now reached 17 million. However, as always seems to be the case with anything relating to cryptocurrencies, things are not that simple.
The way that Bitcoin mining works means that roughly every 10 minutes, miners will find a block of transactions, which triggers the Bitcoin network to add 12.5 new coins to the total supply. Each time this occurs, it is logged on the blockchain. For those who have wandered in by mistake – the blockchain is basically a digital ledger that keeps a complete record of all the activity that occurs on the blockchain, in this case Bitcoin.
For the Bitcoin community, hitting that 17 millionth coin was a major milestone, and one that was widely celebrated. However, it wasn’t long before the skies opened to rain all over the parade. While data from the Blockchain website suggested that the 17 millionth coin had been mined, James Lopp – a Casa engineer, and the creator of satoshi.info – noticed that the data provided did not give the full picture.
In particular, the data from the blockchain.info website, generally regarded as one of the most reliable sources for Blockchain network data, had failed to take into account the instances where bugs and other factors led to miners not claiming their full reward.
Unfortunately, this may be indicative of a problem that stretches beyond Bitcoin, one which could potentially apply to blockchain technology more generally. This larger problem stems from the opaque methods which are used to analyse blockchain data.
What Does This Mean?
There are many ways that blockchain technology can be used. One of its most promising applications is as a means of certifying a supply chain. Whether you are buying cheap clothes, or even a wishbone starting from £7,86 up for your car, you may well want to be able to check, with certainty, whether the products you are buying are being produced ethically and sustainably. But if there are questions about blockchain’s reliability then it is no longer fit for this purpose. It is the supposed infallibility of blockchain that allows it to be used for this purpose.
While it appears that this issue is related more to the methods of data analysis that researchers use, if there is a perception amongst the public that blockchain is not as reliable as we are led to believe, the entire system falls apart. It therefore seems that the most prudent solution to this problem would be to encourage greater transparency in the collection and analysis of data relating to the Blockchain.
Blockchain is one of the most significant technologies of our time. Its potential applications are too numerous to list here, but it has the potential to provide an elegant and reliable solution to a number of problems which have previously had none, or those that were unsatisfactory. The aforementioned potential for blockchain to certify supply chains could radically change the way that consumers buy products. It could soon be very simple and quick to ascertain exactly where the product you are looking at has come from.