Blockchain: Blueprint for a New Economy

11. Endnotes and References

12. Index

Blockchain

Blueprint for a New Economy

Melanie Swan

Blockchain

by Melanie Swan

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978-1-491-92049-7

[LSI]

Preface

We should think about the blockchain

as another class of thing like the

Internet—a comprehensive

information technology with tiered

technical levels and multiple classes

of applications for any form of asset

registry, inventory, and exchange,

including every area of finance,

economics, and money; hard assets

(physical property, homes, cars); and

intangible assets (votes, ideas,

reputation, intention, health data,

information, etc.). But the

blockchain concept is even more; it

is a new organizing paradigm for the

discovery, valuation, and transfer of

all quanta (discrete units) of

anything, and potentially for the

coordination of all human activity at

a much larger scale than has been

possible before.

We may be at the dawn of a new

revolution. This revolution started with

a new fringe economy on the Internet, an

alternative currency called Bitcoin that

was issued and backed not by a central

authority, but by automated consensus

among networked users. Its true

uniqueness, however, lay in the fact that

it did not require the users to trust each

other. Through algorithmic self-policing,

any malicious attempt to defraud the

system would be rejected. In a precise

and technical definition, Bitcoin is

digital cash that is transacted via the

Internet in a decentralized trustless

system using a public ledger called the

blockchain. It is a new form of money

that combines BitTorrent peer-to-peer

file sharing1 with public key

cryptography. 2 Since its launch in 2009,

Bitcoin has spawned a group of

imitators—alternative currencies using

the same general approach but with

different optimizations and tweaks.

More important, blockchain technology

could become the seamless embedded

economic layer the Web has never had,

serving as the technological underlay for

payments, decentralized exchange, token

earning and spending, digital asset

invocation and transfer, and smart

contract issuance and execution. Bitcoin

and blockchain technology, as a mode of

decentralization, could be the next major

disruptive technology and worldwide

computing paradigm (following the

mainframe, PC, Internet, and social

networking/mobile phones), with the

potential for reconfiguring all human

activity as pervasively as did the Web.

Currency, Contracts, and

Applications beyond Financial

Markets