Even money has taken the leap from coins and bills to bits and bytes. In 2008, a peer-to-peer electronic cash system was born as the infamous Satoshi Nakamoto coined a paper with the same name. Bitcoin launched as an open-source killer-app to eliminate the middleman, let users be the bank, while serving the unbanked and underbanked.
The system of mining and distributed ledger allowed the bank anonymity and privacy, while also providing transparency for every user. Since, Bitcoin and now over 7,000 other cryptocurrencies offer a new asset class as secure as the dollars that fold in our pockets or the gold in a bank. Everything is built on supply and demand. The demand has been so large that even though Bitcoin is an early teenager, $1,000 invested 10 years ago is worth hundreds of millions of dollars, making many Bitcoin millionaires and billionaires.
Blockchains have created a system to record owning “digital things.” As the internet is an information machine, blockchain is a trust machine. Blockchain creates a decentralized trust mechanism through cryptography, timestamps, and distributed ledgers that others can verify. Blockchain will evolve into a distributed business model, which is open-source, free, and connected to every dual authenticated smart phone in the world. Assets like Ethereum are built on the blockchain with the ability to attach smart contracts to the transaction. Smart contracts automatically execute all or part of the agreement, which is written into the code. This creates trust that whatever the agreement, it will go down as agreed upon. The blockchain will start to become part of nearly every industry, just as the internet before it. The future blockchain will be built on top of the internet as we are already seeing a lack of trust from fake news, data hacks, scams, and fraud appearing everywhere someone is connected.
Blockchain, meanwhile, has its own deceptive history as it evolved over nearly 20 years, prior to Bitcoin. David Chaum founded DigiCash in 1989 in a paper titled “Blind Signatures for Untraceable Payments,” started the movement towards a dig- ital currency. Later in 1991, Stuart Haber and W Scott Stornetta described a “cryptographically secured chain of blocks,” giving birth to the idea of blockchain. In 1998, Nick Szabo launched BitGold, yet the world was still not ready for this idea. It wasn’t until 2008 when the…