This isn’t a currency. It’s a consensus network. This is the holy grail of distributed systems of the last 15 years. You can do so much more than currency. — Andreas Antonopoulos, Bitcoin OG
I’ve been following the Bitcoin saga for a while. Not because I’m interested in Bitcoin as an investment opportunity or even as digital cash — although it does encourage us to consciously think about what money is and how and why we use it.
I understand where the uninitiated are coming from. “E-money”, nefarious nerd nü-money … I hear you.
But there’s more to Bitcoin than money.
What’s interesting about Bitcoin is the underlying technology.
This is a new paradigm.
Just as the internet decentralized communication, the Bitcoin protocol has the potential to decentralize decision making and replace outdated hierarchical systems.
Bitcoin is a technological innovation: purely disruptive in form and function. Arguments by economists that ignore the technology are worthless. — The Greater Promise of a Blockchain
The core invention of Bitcoin is a distributed consensus ledger that is not limited by or susceptible to the ambiguities of language — which is the basis of most law.
This is smart, self-executing law. Scalable in a way that makes hierarchy redundant.
Bitcoin is a system to replace a centralised banking intermediary (that we have to trust to accurately record electronic money transactions), with a decentralised intermediary that we don’t have to trust. That decentralised intermediary is a network of Bitcoin users. — How to explain Bitcoin to your grandmother
So. Replace the thing we have to trust with a thing we don’t have to trust? Yes.
Basically: Trust math. It is unfuckwithable.
[As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they’ll generate the longest chain and outpace attackers.]
If you want to know more about how the Bitcoin protocol actually works I recommend reading Satoshi Nakamoto’s original paper and Michael Nielsen’s How the Bitcoin Protocol Actually Works. You can also contribute to a book about it here. And read about Distributed Autonomous Community (DACs).
Voila, a time-stamped, cryptographic-ledger, distributed over a decentralised peer-to-peer network: a technological marvel that can’t go away. — Tristan Winters
This is an invention. It cannot be uninvented. It will evolve. Don’t be Lars Ulrich about this.
In my simple brain, I can imagine using this type of distributed consensus for lots of things.
Consider ways we could replace kafkaesque systems with open systems, modernize adjudication, or implement local services for the unbanked and existing grey markets, for example. Or consider how Ethereum aims to transform law in the way Bitcoin is transforming finance.
Smart contracts combine protocols, users interfaces, and promises expressed via those interfaces, to formalize and secure relationships over public networks. This gives us new ways to formalize the digital relationships which are far more functional than their inanimate paper-based ancestors. Smart contracts reduce mental and computational transaction costs, imposed by either principals, third parties, or their tools. — Nick Szabo, Formalizing and Securing Relationships on Public Networks
To limit Bitcoin or a block chain to the existing paradigms of hierarchical governance is thinking too small.
I’m writing this because I’m bored with the majority of current Bitcoin conversations and I want to encourage more people — including plebs like me — to think about the kinds of truly radical inventions and innovations that are now possible.