Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World

by Don Tapscott

Those systems don’t burn electricity as the bitcoin blockchain does.

fourth way to address the energy waste, what he calls “proof of disk,” where owners of disk storage space—people

Satoshi Nakamoto wrote, “You will not find a solution to political problems in cryptography.”

must oversee the unforeseeable.

common law isn’t affecting technology law; the common law is technology law.

Combine a precisely coded version of personhood with a precisely coded version of society, and you get the stuff of science fiction novels and Arnold Schwarzenegger movies.

haven’t been good stewards of the public trust.

society needs governments to deliver services for their citizenry and corporations to create jobs and wealth. But that’s different from capturing a disruptive technology and its largesse in ways that limit its greater benefits to society.

a 137-hour session, it mined 152.8 microbitcoin (μBTC), roughly three and a half U.S. cents at the time. But at ten cents per kilowatt-hour, Bob’s computer used about fourteen cents of electricity. Bob concluded, “The days of mining bitcoins from your PC are now over.”

displacement of workers through automation is nothing new.

itself as it disintegrates into warring factions. There are countless issues. Bitcoin core developers Gavin Andresen and Mike Hearn have been advocating for an increase in block size from one megabyte of data to as large as twenty megabytes. Bitcoin is not “a token for rich people to trade back and forth. . . . It is a payment network,”

“That governance model is driven very much by what code the people actually want to run, what standards people want to implement in the equipment they sell.”

Could terrorists figure out how to hack smart devices so that they performed unwanted actions with devastating consequences?

What happens to privacy when the physical world starts collecting, communicating, and analyzing infinite data that could dog an individual forever? In a 2014 presentation at Webstock, Maciej Ceglowski ranted about Google’s acquisition of Nest, a maker of luxury thermostats with sensors that collect data about rooms. His old thermostat didn’t come with a privacy policy. This smart thermostat could report back to Google, maybe even eat his leftover pizza like a sketchy roommate.56 Many of us are already uncomfortable with a social media environment that tracks our whereabouts and barrages us with personalized marketing messages wherever we go. In the blockchain world, we’ll have better control over such, but will we be vigilant enough to manage our media diet?

blockchains could go far beyond currency and that programmers needed a more flexible platform than the bitcoin blockchain provided.

“If you look at the block-size debate, is it really a debate about block size? In the media, it’s a debate about block size, but I think what we’re seeing is that it’s also a debate on governance.”

We’ve already outlined some of the showstoppers. They are significant. But they are challenges to this revolution’s success, not reasons to oppose it. To date, many issues are still unsolved and many questions unanswered, with little collective movement to resolve them. How will the technology scale, and can we scale it without destroying the physical environment? Will powerful forces choke innovation or co-opt it? How will we resolve controversial standards questions without reverting to hierarchy?

central bankers have been forward thinking in understanding blockchain technology’s importance to their respective economies. There are two reasons for this leadership. First, this technology represents a powerful new tool for improving financial services, potentially disrupting many financial institutions and enhancing the performance of central banks in the global economy. Second, and this is the big one, blockchain raises existential questions for central banks.

Rather than simply regulating, governments can improve the behavior of industries by making them more transparent and boosting civic engagement—not as a substitute for better regulation but as a complement to the existing systems.

Blockchain technology may reduce the costs and size of government, but we’ll still need new Laws in many areas.