The following content is sponsored by the Palm Beach Letter.
With the rise of cryptocurrencies as this decade’s must-have investment, it’s important to understand the blockchain technology powering the crypto market and its ability to revolutionize the world of finance. To get answers, Breitbart News Editor-in-Chief Alex Marlow spoke again with crypto investment expert Teeka Tiwari, whose PickoftheDecade.com presentation and Palm Beach Letter provide investors with the tools they need to navigate this new asset class.
Cryptocurrencies like Bitcoin and Ethereum could not exist without the blockchain, Tiwari explained.
“The blockchain is designed in a way to make it tamper proof. It’s a way to store data,” he said. “When something is on a blockchain, no one can go back and change the data the way they can in a centralized computer system.”
Tiwari compared the blockchain to “a highly secure Excel spreadsheet that we all share and that we can all look at.” But, in the case of the blockchain, if anyone wants to add new data to this digital ledger, a majority of the users have to agree that the data is accurate. “This mechanism is called consensus,” he said, and it’s this innovation that makes blockchain technology both transparent and fraud-proof.
To explain how a blockchain transaction works, Tiwari used the example of someone trying to send Bitcoins to another person. To do so, the blockchain must verify that the person has the Bitcoins to send.
In a typical centralized computer system, a user could potentially corrupt or hack the network to fool it into thinking that he has more than he actually does. But, as Tiwari explained, it’s impossible to corrupt or fool the blockchain because it is entirely decentralized across thousands of computers. In a typical Bitcoin transaction, for example, a majority of the network’s computers must reach a consensus that a user has the Bitcoins to send. The transaction cannot occur until at least 51 percent of the computers on the blockchain agree.
This decentralized fraud-proof transparency is what makes blockchain technology so innovative and revolutionary, Tiwari said.
“It’s powerful because for the first time ever, we are able to create a way of storing data that no one can tamper with, that can run completely by itself,” he said. “There’s no CEO of Bitcoin. It’s all computer code. And those rules, those laws, prevent anyone from tampering with the [blockchain].”
This ability to store information in a way that everyone can trust and verify without relying on a centralized third-party intermediary has “never existed in the history of humanity,” Tiwari said. And the possibilities of blockchain applications have only just begun.
“How is data stored on the blockchain?” Marlow asked.
Tiwari explained that there are blockchain miners whose work secures the network and stores its data.
“Every 10 minutes, there’s a competition on the Bitcoin network. And the network will put out a very difficult math problem. And then all these miners around the world, they use their mining rigs – their computers – to try to solve that math problem. A byproduct of them attempting to solve that problem provides security for the Bitcoin network. So, at the end of that 10-minute period, somebody will win. And then what happens is they receive as a reward: the network issues them Bitcoin,” he explained.
“That competition happens every 10 minutes,” he continued. “So that block of information is where that is stored. And then that block of information gets secured. And then everybody starts working on the next block. And then that second block gets added to the block before it, and so on and so on and so forth. And that’s why they call it a blockchain – it’s because it’s [updated in] these 10-minute blocks of information.”
Tiwari noted that the Ethereum network is updated in new blocks every 15 seconds.
“How do you become a miner?” Marlow asked.
“In order to mine Bitcoin, you need a highly specialized machine that uses these computer chips called ASIC,” Tiwari said. These ASIC (application-specific integrated circuit) chips are programmed to solve complex problems. Blockchain mining requires lots of ASIC chips and access to electricity. “So, you need cheap power, and you need a lot of equipment” to be a miner, he said.
Tiwari explained that each coin has its own blockchain with its own characteristics. As subscribers of Tiwari’s Palm Beach Letter know, the most innovative blockchain is the Ethereum blockchain because it was designed to allow other projects to build off it for real world applications. To give an example of these applications, Tiwari noted how blockchain technology can be used to verify quality control at each step of a product’s supply chain in a way that can’t be faked or retroactively edited. In essence, the blockchain creates an “immutable record” to prove that what was supposed to happen did happen.
The possible future applications of blockchain technology are nearly limitless, which is why the financial world is now fully engaged with this innovation, as Tiwari’s PickoftheDecade.com presentation explains.
Marlow noted that Breitbart News has been a pioneer “at the forefront of the decentralized internet,” and now the blockchain is at the forefront of a decentralized currency model. And what’s more, there is an “anti-establishment” quality to the blockchain that appeals to the Breitbart audience, Marlow said.
“It’s definitely true,” Tiwari agreed. “There’s an application of blockchain technology called decentralized finance. And this went from zero to being a $100 billion business in less than two years. The growth has been incredible. And what we’ve seen is really smart projects figure out new ways of using blockchain.”
We can expect to see more of these applications “eating into different areas of traditional banking,” he explained. One such decentralized finance project that has Wall Street players particularly worried is the trading of blockchain-based synthetic stock versions of stocks like Apple or Tesla.
“This is freaking out the global stock market players,” Tiwari said. “I mean, they are losing their minds. They’re putting all kinds of pressure on any platform that is allowing any kind of trading of stocks because that’s their bread and butter. Can you imagine if all stocks now trade peer-to-peer and we don’t need Wall Street? They make hundreds of billions of dollars in fees – both on trading fees, commission fees, front running our orders, selling our orders. They make so much money from that.”
What’s more, Tiwari explained, the kind of fraud that is endemic with Wall Street stock exchanges is impossible in the decentralized and transparent world of the blockchain. Unlike Wall Street stocks, there is no way to short a blockchain-based stock “because every share is accounted for on the blockchain.”
Tiwari’s Palm Beach Letter updates investors on the latest innovations in crypto and decentralized finance, which is only just getting started.
“The blockchain is going to continue to find its way into different areas of our lives the way the internet did in 1995,” he said.
Tiwari mused that a person in 1995 might have thought that the internet would have no bearing on their life. But now in 2021, the internet is intertwined with every aspect of our lives.
“You can’t escape the internet. The same will be true of blockchain – except the adoption of blockchain will be much faster. It won’t take 25 years,” he said.
He believes the ubiquity of mobile smart phones, which is “the equivalent of a supercomputer based upon what we had 40 years ago,” will “accelerate tech adoption” of the blockchain – with every smart phone user having a digital wallet and various blockchain-based applications on it.
“The adoption [of blockchain applications] is going to happen much, much faster than what happened with the internet – because with the internet, we had to build the whole infrastructure that never existed before,” he said. “Now we have an infrastructure to piggyback off, which is why I call this the trade of the decade.”
Anyone interested in learning more about this revolution in finance – and how to maximize your benefit from it – should watch Tiwari’s PickoftheDecade.com presentation.
“Over the next 10 years, I think the value creation will be astronomical,” Tiwari said. Subscribers to the Palm Beach Letter can get ongoing information on how to harness this potential.