MINNEAPOLIS — After sending shockwaves through the financial industry, now bitcoin is poised to revolutionize digital privacy as well.
Whether it’s between everyday citizens, investors, or corporations, every financial transaction is recorded. The institutions that regulate currency have created a system in which governments, banks, accountants and notaries track these transactions — robbing the public of privacy and control.
Bitcoin was released in 2009 as a currency for anyone who wants to keep the government out of their wallet. The digital currency uses encryption to regulate the creation of coins and verify the transactions. It’s totally decentralized, which means it’s not controlled by a single authority, like the Federal Reserve.
Unlike greenbacks, the Fed can’t just print more cryptocurrency to inflate our way out of trouble.
Its value reflects pure supply and demand, not a value forced into the system by regulation or through government monopolies.
A key technology behind bitcoin is the blockchain and it’s revolutionizing digital privacy while simultaneously keeping data of online transactions in the public’s hand.
Beyond bitcoin, blockchains could be used in any industry, from finance to medicine, to secure transactions and data and track how that data is used.
Like an open ledger, each “block” represents one or more transactions. Though most of us think about bitcoins in purely financial terms, a block on a blockchain can represent anything — like files, photos, or property deeds.
Each block is encrypted so that only the people or companies participating in the transaction have a key, but the data is shared among hundreds or thousands of computers that participate in bitcoin “mining.”
Publicly sharing this ledger creates a new form of accountability and trust. Because of the thousands of copies, hackers or other malicious actors can’t alter data once it’s added. Combined with strong encryption, this means third parties are no longer needed to verify transactions.
Jameson Lopp is a software developer at BitGo, a bitcoin and blockchain security business, and an expert in computer security. He joined me on “Behind The Headline” to explain this more in plain english and how blockchain is revolutionizing data privacy in the ever growing national security state.
Watch the full episode of Behind The Headline:
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