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April 03, 2013, 08:33:12 PM |
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Bitcoin, at it's core, is not about money. It is about designing cryptographic contracts that allow you to trust a crowd of random strangers to do things on your behalf in exchange for a small slice of the value moving through your transactions.
And it is not the first such protocol. It extends from a growing tradition of similar services. Bittorrent allows you to trust a random crowd to distribute files on your behalf. Tor allows you to trust a random crowd to route traffic on your behalf.
The benefits of these protocols over their predecessors (VISA, Napster, and TCP/IP) is that they allow you to create contracts that don't rely on State-Sponsored violence, and all the compromises they entail, for enforcement. In fact, they don't rely on any single individual or organization for enforcement whatsoever.
This accomplishes two major goals: democratization and freedom. Democratization as in bittorrent allowing a single uploader of a video file to have the same reach as CNN. And freedom as in Bitcoin preventing accounts from being frozen, and traffic within the Tor network being unblockable.
Indeed, these services are not institutions, but merely protocols. Well, at it's inception Bitcoin was a protocol, with some proof-of-concept software, and a paper. But once news of the protocol spread to a handful of enthusiasts, the protocol, the blockchain, and the software were out of Satoshi's hands. Today, Bitcoin is simply a powerful idea, reified in the participation of those it behooves to participate.
So the question then arises: How far will this protocolization go? What other services can be protocolized?
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