When you get into Bitcoin, you fall down a rabbit hole, says Peter Smith, CEO of Blockchain, speaking at WIRED Money 2015. You start talking about Bitcoin all the time at social events to other obsessives and to your significant other. "What happens in a few years is that you have no significant others," he jokes, which gives the obsessives more time to work on Bitcoin.
If anyone would know about the Bitcoin rabbit hole, it's Smith, who is at the helm of one of the few original Bitcoin companies. He is therefore the perfect person to break it down. "Really at its core, Bitcoin is just an open access database that anyone can write to," he says. You can't go back in time and the beauty of this is that you can know at what point in time who was responsible for something -- it can't be changed in the future.
People in the financial industry have been getting pretty excited about a Bitcoin 2.0 for a while now. But Smith warns them off. "We're not even at Bitcoin 1.0 yet," he explains. "There will be a Bitcoin 2.0 -- please check back in 7-8 years."
When we do get there, we will stop seeing Bitcoin as the defining feature of those associated it, and instead Bitcoin will become a tool that people use to define themselves -- to assert their identities. "You only have a couple of million people in the world that have any kind of photo identification," says Smith. "Up until the year 2004, any high school user could make a driver's license in the United States of America. You could print your own." It's hard for people to establish the veracity and value of different forms of ID that exist right now, and many people don't even have ID to start with. "So what about all of these people in the world that don't have provable identity?"
Smith thinks he knows the answer. "What about crowdsourcing identity? Other verified people verify me... at some point it gets up to this threshold. Eventually you can build verifiable online identities for people who have never had one."
The internet has only taken us so far in terms of access to information and open communication, he says -- a problem remains. "You're plugged into the global network, you're plugged into the global world, but you can't transact with each other." If only there was a system people could use to transact with each other no matter who they were...
The majority of young people in the world today live in countries where they don't have verifiable, internationally relevant photo identification, and they therefore don't have any way of getting hold of assets. Not so in the world of Bitcoin. Not only can they can assert their identities, but they can buy and sell in a world where their ownership of assets is recorded in a way that cannot be tampered with. If they throw themselves down the rabbit hole, they will find their verified selves waiting at the bottom.
The internet has opened up the world, but it would be easy for traditional banks to miss out on the new customers that the internet brings. Cryptocurrency has the power to change that. "Bitcoin is the platform that's going to take banking from being closed to being open," says Smith.
This article was originally published by WIRED UK
