It’s always fun when tech entrepreneur and Singularity University Chair Brad Templeton appears on the Big Think homepage. His interviews are always filled with keen insights — not just about technology, but also about how technology shapes our lives. In today’s featured interview, Templeton talks Bitcoin, the digital currency. Should you invest in it? No, probably not. But that doesn’t mean it’s not an amazing innovation that could spur further advancements:
“So what Bitcoin creates is a ledger that needs no bank. And that’s actually pretty important because if you think about what is a bank, at least as far as the money transfer and the checking and savings, not the loan part, but the financial, the moving money part of a bank, it’s really it’s a secure ledger.”
This is the crux of why Bitcoin is so fascinating. It’s Disruption 101. How do you subvert banking control over currency? Create a currency that needs no bank. But this disruption stretches beyond the banks:
“What the designers of Bitcoin created was a way to make a ledger that’s secure and that everyone can trust, but that no one owns or controls. And this allows people to have money that can be free of the influence of governments, which is both bad if you’re a government and great if you don’t like what governments do with their monetary policies.”
So what we have here is a currency free from banks and free from governmental control. Why is that a big deal? First, Bitcoin represents yet another example in a series of triumphant innovations made possible by the free and open internet. You don’t need to ask anyone’s permission to develop groundbreaking new technologies via the internet. What birthed Bitcoin is the same freedom that begat Facebook and YouTube.
Second, Bitcoin is extremely efficient, so efficient that it opens opportunities that previously didn’t exist:
“It’s designed to allow financial transactions to take place at a very low cost. But, this system that doesn’t have anyone controlling it and thus has no one to ask permission of is a system that will allow that type of innovation to take place in the world of finance and in the world of contracts. The same kind of innovation that happened in the world of communications and interacting with other people that the internet gave us.”
Finally, Templeton feels Bitcoin could completely revolutionize how we write up and enforce contracts:
“The only thing people use Bitcoin for today is effectively to write checks that transfer title in some Bitcoins to another person or another secret numbered account because it’s designed to be public in what you do, but private in terms of who’s doing it. It actually becomes possible to do things like write a contract and say I transfer one Bitcoin to you if the following is true, like if you’ve delivered the thing you’re supposed to deliver to me or something like that. And so now the contracts are enforced without courts, without any other third party.”
Like most examples of exponential technology — expanded bandwidth, crowdfunding, etc. — we’ll just have to wait and see what the bright minds “in their father’s basements” are going to come up with once they play with Bitcoin for a while.