Innovation in America, and Silicon Valley in particular, has never waited for permission. The ease of starting companies, the low barriers to accessing capital, and (of course) the existence of an open and free internet on which anyone can build anything have all been major contributors to the vitality of Silicon Valley and the wider tech industry, which permeates nearly everyone’s daily life. The most successful companies of our time — Apple, Google, Facebook, Twitter and more — didn’t have to ask anyone for permission to innovate. They didn’t have to explain their businesses and get special licenses. They just came up with an idea and built it.
This is important.
Blockchain technology is the distributed database that underlies digital cryptocurrencies such as Bitcoin. Various consensus algorithms can create distributed ledger systems to achieve a verifiable public record of transactions, replacing trust in people or institutions with a trust in mathematics. All of these technologies provide an extremely useful solution for keeping a reliable record of digital information — a practical answer to the theoretical conundrum known as the Byzantine Generals Problem. Keeping track of digital tokens in order to prevent double-spending is the most obvious application, but blockchain technologies allow for any kind of transaction without a requirement for a trusted third party, intermediaries or centralized authority. Hundreds of digital currencies based on blockchain technologies are valued in the billions of dollars with over 100,000 merchants accepting bitcoins, but the applications extend beyond digital cash.
This case study examines the impact of blockchain technology’s impact beyond just its use for digital currencies like Bitcoin.