Bitcoin: How its core technology will change the world

bitcoinnewscientist

One of the more advanced concepts being touted for a next-generation Bitcoin is the idea of decentralised autonomous corporations (DAC) – companies with no directors. These would follow a pre-programmed business model and are managed entirely by the block chain. In this case the block chain acts as a way for the DAC to store financial accounts and record shareholder votes.

In a way, Bitcoin is actually the first DAC, says Daniel Larimer, a developer in Blacksburg, Virginia. People who own bitcoins are shareholders in the company, which offers financial services, earns revenue through transaction fees and pays a salary to its employees, the miners. But no one is in charge.

Larimer has started his own DAC, called BitSharesX, which he says can perform the actions of a bank, lending other currencies to customers, who can provide BitShares as collateral. Other potential business models for a DAC include election services and lotteries, all run automatically. “The key to a DAC is that it should not depend on any one person.”

Mike Hearn, a Google employee and Bitcoin developer, thinks Bitcoin could usher in a different class of decentralised trader: a computer that owns itself. He proposes the idea of autonomous agents – such as software or a self-driving car – that trade on the Bitcoin network, receiving payment in bitcoins that can in turn be spent on maintenance or other services the agent needs.

Whatever happens to Bitcoin, the potential the block chain offers is huge. “This theme of using fancy maths and software to disperse existing power structures is one to which I think our society will return again and again in the coming decades,” says Hearn.

Read the full article in the New Scientist here.

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