What is Bitcoin telling us about Internet innovation?
Time will tell if Bitcoins take hold, disappear or remain on the fringes forever.
Supporters believe that Bitcoins enable easier, safer and faster exchange of money using modern technology.
They like that Bitcoins can allow a financial transaction between parties without a central institution, just relying on a network of computers at lower friction costs.
Many like its concept of a universal and an open ledger. Detractors point to the lack of state and institutional support as a major stumbling block, while others think it is a bubble that will crash. There are questions about its scalability and stability as well.
Irrespective of what happens in the future, the phenomenon of Bitcoins makes one think if we really have exploited the Internet as much as we think we have. There have been many innovations in financial services using the Internet in the last couple of decades.
Yet, the advent of Bitcoins with new digital actors and roles that neglect banks and clearing houses shows how many components of our monetary infrastructure are still replicas of edifices built primarily for a brick and mortar world.
It also shows that large and fundamental innovations using internet are still possible with the Internet, if we are willing to challenge some basic premises.
What other areas come to your mind where we have transposed onto the internet processes and systems that were built for a physical world, ones that are candidates for a second look on how we do things?
