authority. Think about that: from a bunch
of anonymous computers that have no reason to trust one another, an ironclad network has emerged that can support a whole
currency. Literal money—what could be a
more valuable target for hacking or compromise? And yet there it stands, unperturbed amid the chaos of the Internet.
It’s heady stuff. And little wonder,
then, that people think the incorruptible
math underlying Bitcoin’s blockchain
could, if adapted properly, make business
processes in a range of industries vastly
Still, Bitcoin faces big questions over
how it should modify its software to
adapt to its growing popularity. Keeping
the system running uses vast amounts
of energy. And its blockchain is public,
meaning transactions can be traced.
Bitcoin’s younger cousin Ethereum
generally shares these characteristics.
Meanwhile, some industries that stand
to benefit most from blockchains—finance
and health care, for example—are also
highly regulated with respect to data
privacy and security. Some say the best
course is to pursue di;erent kinds of vehicles, like blockchains that have been modified so they require permission to access.
To Bitcoin acolytes, though, that
misses the point. Bitcoin’s scaling issues,
its energy consumption, and even its privacy challenges can be addressed through
research and development, they argue.
They say “permissionless” blockchains
like Bitcoin and Ethereum, whose networks are open to anyone who wants to
use and build on them, can form a new
kind of Web in which we won’t have to
trust banks, corporations, or governments
with our valuable data.
In other words, as MIT blockchain
researcher Michael Casey recently argued
in a column for CoinDesk, open blockchains could “save us from the Internet’s
original sin.” —Mike Orcutt
The Bitcoin phenomenon isn’t about a bunch
of people who all believe the cryptocurrency is a good investment. That’s part of it.
But for many, the belief in Bitcoin’s power
to transform society runs much deeper:
it’s almost an article of faith. Where does
this fervor come from? To understand, it’s
important to keep in mind that “the blockchain” is not really a thing.
A blockchain is a shared, permanent,
encrypted data set, created by a network
of computers according to a set of software
rules. But there are di;erent ways to set
up those rules. The word “blockchain” is
like the word “vehicle,” explains Peter Van
Valkenburgh, director of research at Coin
Center, a blockchain-focused think tank.
Saying you are putting something on “the
blockchain” is like saying you are going
to use “the vehicle” to travel overseas. It
makes more sense to talk about “cars,
trains, boats, or rocket ships, depending
on what it is about the vehicles that we are
interested in,” Van Valkenburgh argues.
Bitcoin is the type of vehicle that gets
the most attention, and deservedly so. Its
blockchain was the first, it’s been running
the longest, and its network is the biggest.
To many people, Bitcoin’s breakthrough is
just as much about social innovation as it
is technical. They believe the new model
it represents can revolutionize how people
share value and do business online.
There’s a good reason for that. Bitcoin has shown that it is possible to use a
network of computers, connected via the
Internet, to build and maintain a set of
valuable shared data—in this case a ledger
of account balances that prevents counterfeiting—without the need for a trusted
Why People Get Religious
The cryptocurrency’s price is soaring, but the fervor is about more than just an