Using Blockchains for More Than Money

Bitcoin is a cyber currency that can be used to exchange credit in the same way we use money. In order to exchange credit, we need to establish a level of trust that the token of credit is actually worth something. Small objects that have their own value can be used, such as jewels or gold. And coins or paper certificates that represent actual deposits of valuable objects can be used. But eventually, the concept of “fiat” currency developed. The Latin term, “fiat”, means to decree or declare, and fiat currency means that a government has simply declared that some token will represent a level of value. This works as long as the government and an associated economy is stable enough to create trust.

Bitcoin establishes trust through a system of documentation or journal of history. A journal shows a list of transactions recording the value of exchange and the ownership involved. If we know how much value everybody else is willing to attribute to an object, we can trust that it can be used for exchange. If there is a public record of transactions, we feel confident in our ownership of the value.

Here is a list of journal-like records of transactions that we use in everyday life:

  • Monthly bank statement for checking or credit card
  • Accounting balance sheet of debits and credits
  • Sales records
  • Cash receipts logs
  • Expense account logs
  • Property transactions
  • Audit trails
  • File system data structures
  • Database dictionary change history

By extending this concept of trust and journal record of ownership, we can suggest other kinds of transactions can also benefit from the technology used with virtual currency like bitcoin:

  • birth and death certificates
  • marriage licenses
  • deeds and titles of ownership
  • educational degrees
  • medical records
  • contracts
  • votes

Bitcoin Virtual Money
Journal Signatures Use Merkle Trees of Hashes

Comments are closed.