Blockchain and decentralization hold big implications for society

Chris Clark on the blockchain's potential to disrupt the financial industry, from contracts to mortgages to government taxation.

A_Star_is_Born_Steve_Corey_Flickr

Bitcoin has come a long way from initially being perceived as a pipe dream or fake money. In a recent interview, Chris Clark, a software developer, entrepreneur, physicist, and author of Bitcoin Internals, recalled a story of one of the first bitcoin transactions: someone was congratulated on their “free pizza” after paying in the neighborhood of 10,000 bitcoins for two pizzas. “Now that would be worth, I don’t know, like millions of dollars,” noted Clark.

While Clark said he regrets not getting involved in bitcoin back in 2010-2011, when “bitcoins were super cheap,” he has since researched and written a technical guide to bitcoin, Bitcoin Internals, and expanded his research into the blockchain, looking at the value of blockchain technology for businesses and the potential impacts of decentralization. In our conversation, he described the early evolution direction:

“Right now, we can see that people are kind of looking at bitcoin mostly as just a regular payment system. While I do think that’s definitely a very important innovation, what we’re seeing is a lot of new technologies coming out that are more about things like smart contracts and decentralized organizations, which are right now really in their infancy. I think that those are actually going to be much bigger in overall impact than the payment system itself.”

The concept of decentralization has potentially disruptive societal implications. Clark noted that the implications are likely to extend well beyond things like smart contracts:

There are cases where government taxation is going to change a lot because when you have a decentralized organization that doesn’t really belong to a country, then who is actually going to claim taxes on that kind of thing? I think there’s going to be a shift in the way that government handles taxation, and that’s a pretty huge deal. There’s going to be implications related to that and also in optimizing a lot of different things — like mortgage issuance and title insurance. There’s a lot of overhead in these financial transactions, mostly because we’re using semi-antiquated systems based on paper records. These can be replaced with blockchain electronic records, which will guarantee that everything works out fairly, and you won’t need as much overhead paying people for insurance and administration costs.”

You can listen to our entire conversation in the SoundCloud player below or on our SoundCloud stream. Clark will host a webcast on these topics and more — How Bitcoin 2.0 Will Shape the Future of Business — on December 16 at 10 a.m. PT. You can register for the free webcast here.

You might also be interested in our upcoming event, Bitcoin & the Blockchain: An O’Reilly Radar Summit, being held in San Francisco on January 27, 2015. Register for the conference here — and, of course, bitcoin can be used to pay for registration.

Cropped image on article and category pages by Steve Corey on Flickr, used under a Creative Commons license.

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  • Nick Yeates

    Completly true. I have noticed this game changer recently. It is a new paradigm that, if bitcoin doesnt make the changes, the decentralized problem that has been solved, will effect all kinds of other systems. The idea of the blockchain and how bitcoin is implemented could be a lot better. It can also be used in other industries to solve multitudes of issues. It will change the world as we know it.