MUST READ — The coming digital anarchy
Bitcoin is giving banks a run for their money. Now the same technology threatens to eradicate social networks, stock markets, even national governments. Are we heading towards an anarchic future where centralised power of any kind will dissolve?
The same technology that powers Bitcoin can be harnessed to disrupt a range of other systems | Photo: Bloomberg News
by Matthew Sparkes, Deputy Head of Technology
Telegraph
Jun 9, 2014
The rise and rise of Bitcoin has grabbed the world’s attention, yet its devastating potential still isn’t widely understood. Yes, we all know it’s a digital currency. But the developers who worked on Bitcoin believe that it represents a technological breakthrough that could sweep into obsolescence everything from social networks to stock markets… and even governments.
In short, Bitcoin could be the gateway to a coming digital anarchy – “a catalyst for change that creates a new and different world,” to quote Jeff Garzik, one of Bitcoin’s most prolific developers.
It’s already beginning. We used to need banks to keep track of who owned what. Not any more. Bitcoin and its rivals have proved that banks can be replaced with software and clever mathematics.
And now programmers of a libertarian bent are starting to ask what else we don’t need.
A Bitcoin dispensing machine at a shopping mall in Singapore
Imagine driverless taxis roaming from city to city in search of the most lucrative fares; a sky dark with hovering drones delivering your shopping or illicit drugs. Digital anarchy could fill your lives and your nightmares with machines that answer to you, your employers, crime syndicates… or no one at all. Nearly every aspect of our lives will be uprooted.
To understand how, we need to grasp the power of the “blockchain” – a peer-to-peer ledger which creates and records agreement on contentious issues with the aid of cryptography.
A blockchain forms the beating heart of Bitcoin. In time, blockchains will power many radical, disruptive technologies that smart people are working on right now.
Until recently, we’ve needed central bodies – banks, stock markets, governments, police forces – to settle vital questions. Who owns this money? Who controls this company? Who has the right to vote in this election?
Now we have a small piece of pure, incorruptible mathematics enshrined in computer code that will allow people to solve the thorniest problems without reference to “the authorities”.
The benefits of decentralised systems will be huge: slashed overheads, improved security and (in many circumstances) the removal of the weakest link of all – greedy, corruptible, fallible humans.
But how far will disruptive effects reach? Are we rapidly approaching a singularity where, thanks to Bitcoin-like tools, centralised power of any kind will seem as archaic as the feudal system?
If the internet revolution has taught us anything, it’s that when change comes, it comes fast.
PN 
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