As part of my ongoing effort to respond to friends’ topic suggestions, today I’m taking on, as my friend Ashley put it, “Block Chain – the invisible technology changing the world.” But me being who I am and this blog being what it is, I can’t just talk about Blockchain, I have to explain how or why it would be of interest to technical communicators. Let’s dive in, shall we?
Is this research really necessary?
Interestingly, Ashley’s question has come up before, but I didn’t pursue it as a technical writing topic. An editor/publisher I respect, Anthony Duignan-Cabrera, has been researching and sharing a newsletter for several months about Blockchain and related computer-based activities. In the process of surfing through the articles he shared, I encountered strange terms like “Bitcoin,” “cryptocurrency,” and others. But what did any of it have to do with technical writing? Before I could answer that question coherently, I had to dig in and find out what I was talking about first.
What IS Blockchain, anyway?
Going to the Blockchain site itself was not especially enlightening, as the “About” page talks more about the marketing features. For example:
Blockchain is the world’s leading software platform for digital assets. Offering the largest production blockchain platform in the world, we are using new technology to build a radically better financial system. Our software has powered over 100M transactions and empowered users in 140 countries across the globe to transact quickly and without costly intermediaries. We also offer tools for developers and real time transaction data for users to analyze the burgeoning digital economy.
I read something like this, and I need to parse it into words or phrases I understand:
- It’s a software platform for digital assets (money? databases? intellectual property? all of the above?)
- It’s supposed to benefit the financial system
- It’s already in operation (100+ million transactions across 140 countries)
- It provides tools and transaction data to analyze the digital economy somehow
Then there’s this positioning statement:
Our collective desire to offer financial empowerment is driven by our values. They act as our organization’s North Star.
Below their big-picture statement was a series of whimsical pieces of word art depicting the company’s values:
- Challenge Convention
- Sanctify Security
- Delight in the Details
- Empower the End User
- Be Honest, Humble, Human.
Great, but what is the technology actually doing? How does it work?
So far, I’ve picked up that they’re offering financial empowerment somehow, most likely through providing secure online financial transactions. I suppose that’s fine, but being the geek that I am, I’m still looking for more technical details.
What is Bitcoin?
One of the primary beneficiaries/users of Blockchain is Bitcoin, an online currency that allows people to make payments to each other directly. Here’s how they put it:
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.
After clicking on the “everyone can take part” link above and poking around the site a bit, I came across a page for “mining bitcoins.” I’d heard a little about this, so I watched the organization’s online video to counter my ignorance. The video provides a cute animation depicting the scheme, which has the following attributes:
- Bitcoin is an online currency that is not issued by a national government (hence the term “cryptocurrency”).
- Instead, individuals or groups create Bitcoins by using their computers–individually or linked–to solve mathematical problems. Individuals are rewarded with Bitcoins based on how much of a contribution they or their computer made to solving the math problem.
- Because Bitcoin has grown so much, Bitcoin miners now work more in groups called miner pools, which network their computers to solve the problems. Companies have also started developing application-specific integrated circuits (ASICs) that are optimized to handle these complicated math problems.
- An individual or group of individuals solve a specific problem, their work is confirmed by others working in the system, and the individual miner or miner pool is awarded a Bitcoin for their efforts.
- The Bitcoins are treated as a person-to-person, secure form of payment that is legitimate if the entity involved in the transaction accepts Bitcoin as legitimate.
So is Bitcoin real money or isn’t it?
This business sounds a little bit shady. Creating currency based on the ability of computers to perform math problems? Really? However, as someone pointed out to me, it’s not any stranger or less reliable than basing currencies based on some rare, shiny element or asset(s), such as gold or silver. Gold and silver are values for their appearance, their rarity, and their physical properties, such as ease of forming and electrical conductivity.
Thanks to the Bretton Woods System established in 1944, all the major currencies of the Allies were pegged to the U.S. Dollar, and the Dollar’s value was tied to the value of gold at $35 an ounce. This ensured economic stability in the West, but it created a credit crunch when countries tried to pay for expensive social welfare programs and wars overseas. The only way to expand the money supply was to find (mine for) more gold or silver.
To ease the credit crunch, in 1971 Richard Nixon took the U.S. Dollar off the gold standard, ending the ability to easily convert $35 directly into an ounce of gold. The value of the dollar was allowed to “float” in the money market and is said to be “worth a dollar” because the U.S. Government says it is. The dollar is worth a dollar because the citizens of the U.S. and other nations believe that the “full faith and credit” of the U.S. Government will result in the dollar being honored as worth whatever the market says it is.
The nation’s money supply is further complicated by the Federal Reserve System, which has the authority to print more money, as it has done several times in the decades since 1971, resulting in inflation of the currency and a reduction in its perceived buying power.
So is Bitcoin–a completely electronic system based on solving difficult math problems–any stranger, less valuable, or less “true” than our current economic system?
The originator of Bitcoin, an individual traveling under the name Satoshi Nakamoto invented the system to operate more like a Bretton Woods or 19th century economy, in that the amount of available currency would be fixed (have a controlled supply) to prevent inflation. Based on the algorithms used by the decentralized system total number of Bitcoins is not expected to exceed 21 million. However, at today’s price (2/20/18 when I’m writing this), a single Bitcoin is worth US$11,719.63, making the total Bitcoin “money supply” around US $246 billion. This is an impressive figure, but not exactly good for handling all of the world’s transactions, which might explain why other cryptocurrencies have appeared to compete with Bitcoin.
What are the problems with Bitcoin?
While radio finance consultant Dave Ramsey has noted that over 100,000 vendors accept Bitcoin (and there are other cryptocurrencies out there), authority figures from established financial institutions like the Federal Reserve do not consider them trustworthy sources of value.
Another issue related to acceptance is perceived legitimacy. Bitcoin, courtesy of the Blockchain computer technology, is able to be processed completely anonymously. When people talk about the “dark web,” this is usually what they mean, and people employing the dark web or cryptocurrencies have been caught dealing in illegal drugs and other nefarious schemes.
Conversion to Regular Currency
Bitcoins float around in their own little computerized world, for the most part, so once you or your miner pool has mined a sufficient number of them to be valuable, you have three options:
- Spend them where they’re accepted.
- Save them and acquire more or until they’re more readily converted to, say, dollars.
- Go through a reputable conversion service that will buy the Bitcoins from you and deposit more traditional U.S. Dollars into an online bank account.
How Does the Blockchain Work? Part I: https://www.sitepoint.com/how-does-the-blockchain-work-pt-1/
Back to Blockchain
I found a couple links on Anthony’s updates on how the underlying technology to Bitcoin–the Blockchain–works. Essentially, it’s a system that allows you to track, edit, and add to a transaction online, anonymously and in real time. Someone creates a transaction–say, the creation of a new Bitcoin–and then other people review it or add to it. The theory being, with multiple people reviewing a transaction (like a shared document or Wikipedia), the more people reviewing it, the better the transaction can be verified for legitimacy. If you speak code, this is a peer-to-peer system that allows you to exchange information or Bitcoins online without the hassle of dealing with banks, government tax collectors, etc. Needless to say, governments aren’t thrilled with this technology in its Bitcoin application, but Blockchain could be used for other activities, such as voting or maintaining health records.
So Why Should Technical Communicators Care?
One of the first things I noticed upon doing a search engine inquiry on “blockchain technical writing” was how many white papers and how many jobs are out there for writers to explain Blockchain to uninformed audiences, so there’s that. Hm. Maybe I should try to make a buck off this post.
In the end, as a technical communicator, it’s to your benefit to keep up on the latest trends in technology–both as a topic you might write about and as a technological skill you might use. Study hard, there’s a quiz later.