Next year, Bitcoin will move from a simple currency to an open source, decentralized platform that can manage everything from future contracts to car rentals.
In 2013, not only did the value of Bitcoin rise as a rocket, but so did the number of new services, the infrastructure and the number of accepting merchants increased significantly, culminating in the acceptance of the online store Overstock and the NBA basketball club Bitcoine as a means of payment. Some still doubt Bitcoin’s reliability and resilience, but 2014 will soon be the last of these skeptics. Many developers and businesses are currently working hard to build new capabilities on the Bitcoin Protocol, which would allow for the decentralized provision of financial services such as loans, stock trading, hedging, brokerage and leasing. These new services are based on the same innovative model of shared security, data retention and proof of work that has kept Bitcoin secure and reliable, increasing its value to $ 10 billion. In the long run, a peer – to – peer financial system threatens to weaken banks and other financial institutions, as did peer – to – peer file – sharing services to the music industry. Many of the architects of this new financial system are very grateful for this opportunity.
The Bitcoin protocol (different from the Bitcoin currency) is built to support significantly more complex transactions and relationships than just transferring value (N: get 5 bitcoins to someone). One type of transaction that is supported by the Bitcoin protocol is the so-called M and N transactions, which require the consent of a certain subset and can be used for transactions such as deposits, brokerage, shared financial management, time-limited transactions in the case of. Google Search, for example, uses the same methods to monitor real-time performance and adjust its internal processes to match search terms. It is possible to develop a so-called “smart asset” infrastructures related to digital locks on the Bitcoin network. For example, automatic management of various loans, leases and purchase agreements.
All these transactions can be programmed automatically and the reliability of the transactions can be ensured with the blockchain of the Bitcoin network, which is maintained by the miners, who in turn are rewarded with Bitcoin money. In fact, the comparison with Napster is incorrect here, since Napster’s network used centralized servers to maintain a decentralized network. However, the Bitcoin network is fully distributed – the servers also share a decentralized network. All this means loans without banks, contracts without lawyers and markets without intermediaries, all information being stored equally, reliably and securely on servers around the world.