Bitcoin: It’s the platform, not the currency, stupid!
Machines with an economic identity
The Internet of Things enables all types of objects to be connected to the Internet, such as computers, smartphones, refrigerators, windmills, tiny sensors the size of a grain of sand, etc. Each object has its own digital identity that can be controlled.
The Bitcoin network makes it very easy for these objects to also have an economic identity, in addition to their digital identity. For example, the refrigerator can negotiate with the windmills in the area about energy use given certain conditions. The block chain doesn’t care who’s using it. “On the block chain nobody knows you are a fridge.” Bitcoin makes these transactions simple and reliable.
This will completely revamp the traditional division of roles between people, organizations, and machines. The Bitcoin protocol enables a “smart” machine to participate as a third economic agent alongside humans and organizations in the marketplace.
“[T]hings are going to get very messy indeed.” Companies are already having difficulty implementing B2B, B2C, C2B, and C2C models. This problem will only grow with the advent of B2M, M2B, C2M, M2C, and M2M markets.
In this “futuristic” world, a soda machine can be an independent economic entity that is responsible for managing and selling its own store of drinks. It will be a machine that, in addition to selling drinks to consumers (M2C), will also be able to place orders with companies (B2M). It can even place orders with consumers (C2M) to fill its store.
This will of course entail questions about who exactly is legally and economically responsible (say, if someone were to get sick from a can of soda from one of these machines, for example).
Additionally, think of a service that can access the Internet to play a simple game of chess. Each time you play a game, you have to pay the service a small amount of bitcoin. When the creator of this service dies, the service dies with him, because the bill of hosting this service isn’t paid for anymore.
But now we have bitcoin, so it can be a completely valid situation where this service has its own bitcoin wallet. Each time someone plays a game of chess, the money for this service will be transferred to its wallet. The money earned from this service can than be used to pay for the hosting. “So basically Bitcoin will power the next generation of corporations. The real value of Bitcoin lies in economies that don’t yet exist.”
Next: The dawn of decentralized autonomous corporations