With Bitcoin, don’t think currency, think platform
While most people think currency when we talk about Bitcoin, the real value is in the algorithm. I could get into the ins and outs of how Bitcoin actually works but Bitcoin.org does a better job. Because of the way Bitcoin’s infrastructure is set up, you can securely transact anything. Not just money but contracts, taxes, voting and so on. This is where the real power lies.
What are a few examples? Here are some of the more talked about uses for Bitcoin.
- Bitmessage - a secured peer-to-peer messaging system
- Namecoin - a decentralized DNS service
- Open markets - used to buy and trade almost anything
- Virtual postage stamps - email spam prevention
- Proof of ownership - for digital or scarce goods
- Triple-entry accounting - for government or non-profit transparency
- Distributed identity systems - for identification distribution and maintenance
- Provably secure voting systems - citizens can vote anywhere, any time, and you’re verified by a secure key
- Contracts - the network monitors if the conditions of a contract have been met and if so would execute the contract. This would work for everything from mortgages to car title to stock certificates
- Fraud prevention - due to the nature of Bitcoin, every single transaction is tracked, logged and saved. Forever.
But these are just a few uses. Remember, anything that you can transact you can do so with Bitcoin.
What is often referred to as alternative chain is a system that uses the block chain algorithm, but for non-financial purposes. It can be used to implement DNS, P2P currency exchange, API, SSL verification authorities, file storage and even a voting system.
Once people get over the fear of Bitcoin being anonymous (it’s only pseudo-anonymous) and realize that the whole point of the block chain is that it’s public, people will open up to the idea of implanting the technology of Bitcoin. Bitcoin is uniquely pseudo-anonymous while being completely traceable – it’s incredible.
Two groups, BitShares and Ethereum, are looking to take this idea to the next level and apply the Bitcoin infrastructure to everything.
BitShares founder and CEO Daniel Larimer has his eye on stock exchanges, voting, music distribution, and so on. He calls such futuristic entities distributed autonomous corporations. To use the music example, Larimer envisions artists having the ability to issue shares in their own songs, encouraging fans to spread the tune far and wide to increase returns.
For an idea of what else might be next, Mike Hearn, a Bitcoin developer, talks about the next 50 years of Bitcoin.