- Aafia Shabazz
Block Chain and Black Economics Part 1
Beyond Bitcoin & first generation decentralized applications
Although commonly associated with Bitcoin, block chain technology has many other applications that go way beyond digital currencies. In fact, Bitcoin is only one of several hundred applications that use block chain technology today. Until relatively recently, building blockchain applications has required a complex background in coding, cryptography, mathematics as well as significant resources. But times have changed. Previously unimagined applications, from electronic voting & digitally recorded property assets to regulatory compliance & trading are now actively being developed and deployed faster than ever before. By providing developers with the tools to build decentralized applications, Ethereum is making all of this possible.
At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.
Is Ethereum similar to Bitcoin? Well, sort of, but not really.
Like Bitcoin, Ethereum is a distributed public blockchain network. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and capability. Bitcoin offers one particular application of blockchain technology, a peer to peer electronic cash system that enables online Bitcoin payments. While the Bitcoin blockchain is used to track ownership of digital currency (bitcoins), the Ethereum blockchain focuses on running the programming code of any decentralized application.
In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn Ether, a type of crypto token that fuels the network. Beyond a tradeable cryptocurrency, Ether is also used by application developers to pay for transaction fees and services on the Ethereum network.
Smart contract is just a phrase used to describe computer code that can facilitate the exchange of money, content, property, shares, or anything of value. When running on the blockchain a smart contract becomes like a self-operating computer program that automatically executes when specific conditions are met. Because smart contracts run on the blockchain, they run exactly as programmed without any possibility of censorship, downtime, fraud or third party interference.
How Does this effect the Black Community?
Online reports, however, showed that there are fewer African American people engaged in crypto transactions than whites and Hispanics. A list of reasons was discussed, and these reasons alone may already paint a broader picture—that only a small group of African American bettors can actually wager bitcoins online.
Here are the major reasons:
Cultural differences and racial perception play a role
Most often than not, the people indulged in the crypto ecosystem are of European, Asian, and American descent. It should be noted, however, that the majority of Americans involved are white.
This is evident with the leaders, entrepreneurs, and investors that continue to revolutionize the cryptocurrency domain, leaving black people out of the equation.
Nonetheless, the lack of African Americans visible in the crypto markets should not be taken as the racial group is oblivious of crypto. It just so happens that racial perception and cultural differences, specifically in the financial aspects, are paramount.
For instance, African American people are reported to have been ambivalent about the arms-length nature of crypto transactions. After all, they prefer to have physical connection with how they transact money, causing some to even distrust financial institutions. As such, the recent Mt. Gox controversy only increases the distance they possibly will maintain away from Bitcoin.
Wealth disparity compared with the whites is apparent
If the whites’ wealth index is to be used as the standard, it would be evident that African American people have lesser savings. Therefore, for them to invest their money to cryptocurrency like Bitcoin will be disadvantageous. Instead, it would be better for them save up small savings than to risk their finances on a volatile digital currency.
Volatility makes Bitcoin undesirable
Bitcoin price has seen highs and lows, but it never seems to stabilize just yet. Its volatile nature significantly influences how the African Americans behave in terms of adopting the cryptocurrency. While the community is regarded as a powerful consumer force, it would not willfully join the global trend unless Bitcoin tones down its unpredictable behavior.
The future of African Americans in the Bitcoin gambling arena
Once all the hindrances are ironed out, more African Americans are expected to indulge in the growing and maturing market of Bitcoin gambling. This, however, will only transpire if they slowly but significantly view Bitcoin as a friendly and secure technology and payment system. It should be noted, though, that modifying a cultural behavior like this will take time.
They may be seeing less action during the first few years of Bitcoin’s existence, but they are showing signs of potentially embracing the market. After all, as words of Bitcoin’s success continue to spread, more African Americans will possibly be buying bitcoins in the years to come, and later on, wagering some on the Bitcoin games on the web.