Here is how the United States can work with Bitcoin and Blockchain for consumers

Now that President Donald Trump has pledgedAmerica is the capital of encryption“I just announced plans to create”Crypto strategic reserve“It is worth a review of what exactly Bitcoin And Cryptoassets everything is about.

It is often incorrectly associated with understanding, Blockchain and Cryptoassets technology wrongly with chaos and disorders. In fact, the Blockchain community is a haven for technical institutions who believe they are important problems. Given the reasonable government policy, this wonderful community can provide a significant value to the wider economy. But weak policy can allow fraudulent activity to reproduce.

I am looking and know Economy encryptionAnd I can tell you that Blockchain technology comes quickly and difficult. There are many warnings, but there are a lot of opportunities.

First, a little date. In 2008, Cryptoasset began with a short technical document, White Bitcoin paperWhich has proposed a technique that we now know as Bitcoin Blockchain. In short, it is a digital notebook that records Bitcoin, a digital origin created on the Bitcoin notebook. The transfer of bitcoin assets is recorded in pieces known as the blocks, and the blocks are seen over time in a chain. It is a series of blocks – it is Blockchain – a publicly audited path for all bitcoin transfers forever.

Bitcoin is “Without permission,“This means that Blockchain does not require any central authority, such as the bank, to settle payments. Circular, which is properly dealt with, can create a more competitive market to benefit consumers. Certainly, there are also some bad actors in the Cryptoasset sector, and thus some risks associated with their growth.

There are two important things that are especially important to understand it about Bitcoin. First, Bitcoin relies on established computer science methods, including an encoding digital signature, encryption retail function and random mail fighting protocol (evidence of work). In other words, Bitcoin depends on solid intellectual foundations.

Second, the real importance of bitcoin is that it has resolved an important economic issue: the problem of double spending. In the traditional financial system, all payments pass through a bank or another central broker, which simply rejects any batch that exceeds the user’s balance. But the payment system user without permission can spend the same balance twice, and the system is effective effectively

Bitcoin is that it builds a new format base, Nakamoto, to enable an unlimited set of decentralized parties to coordinate to prevent double spending without the need for a central medium. Ultimately, this is what the technology obsessive is interested in all over the world and pushes developers to Blockchain.

However, Bitcoin is no longer the main focus of the Blockchain community. In 2015, Ethereum Blockchain was launched, and the form was converted. Bitcoin is just a payment system, while Ethereum is a virtual computer, as it brings a wider set of applications. Ethereum Blockchain allows the publication of programs that can be coded to provide financial services without an intermediary. Since anyone can spread a computer program on Ethereum Blockchain, this creates a competitive market, which benefits customers. Some financial services provided on Ethereum Blockchain include trading, borrowing and lending.

It is difficult to design computer programs to provide intermediate financial services. These programs should be simultaneously solid to ensure transparency, but they are flexible to maintain solvency during the negative market conditions. However, the Blockchain community has made remarkable progress: billions of dollars move daily through these computer programs, which have maintained the sheet despite the volatile market fluctuations.

Bitcoin was an intellectual spark that started fire. There is now an army of great developers who improve the provision of financial services through computer programs. On this background, it is important to realize that government policy can allow or undermine technological and economic progress.

The president has already released Executive order On encryption. It is wise to embrace Crypto as a reality instead of ignoring it or, and worse than that, pushes it away. At work with instead of against Checks, policy makers must seek to serve a suitable infrastructure role, as the government does for the Internet. In this way, policymakers can support intellectual fireworks in the Blockchain community while providing reasonable guarantees to protect users.

Fahd Saleh, PhD, Associate Professor at Warrington College of Business at the University of Florida. He examines his research on economic questions related to Blockchain and Cryptoassets.