Bitcoin as the Ultimate Democratic Tool

Bitcoin is gaining more mindshare in the general population with each passing day, capturing the attention of people, governments and businesses around the world. Is it a currency? Is it property? How can it be taxed and tracked, catalogued and pigeonholed? Those are all interesting questions, to be sure. They are important questions that need to be answered, but what many people may not realize is that bitcoin is all of those things, and it is none of those things.

There are two different bitcoins. There is “Bitcoin” and there is “bitcoin.” But what is the difference? In a nutshell, “Bitcoin” with a capital “B” is the Bitcoin protocol. Bitcoin with a lower case “b” is the currency. This sounds like a fine distinction, but it is important…very important.

Often times referred to as “BTC” or “XBT,” the currency is what most people think of when references are made to bitcoin. This is what is in the public mind and what all the aforementioned questions discuss.

But what about the protocol? It is almost unfortunate that they are both called bitcoin, because one has very little resemblance to the other. “Little b” bitcoin, the currency,can be traded between people and businesses, is stored in a wallet and has a discrete value per unit. “Big B” Bitcoin, the protocol, is none of those things. However, it does define how bitcoin behaves and how it exists, how it’s transferred, where it’s stored and what protects it.

But it can do much, much more than that. Bitcoin is the ultimate democratic tool. Each Bitcoin address is unique in the universe. It can’t be forged, falsified, stolen or counterfeited by any known technology. It is, in effect, bulletproof; we have had the ability to uniquely identify every person on the planet for many years now, but for the first time in history, we have a way to uniquely identify every person on the planet, and guarantee that person is who they say they are. And we can do it anonymously. No personal information is exchanged, yet we can ensure identity – a form of a digital fingerprint. 

How is this possible? Bitcoin is, in essence, a public and private key pair. As long as you keep your private key private, known only to you, you can conduct all manner of business without the requirement of revealing any information about yourself beyond your public key. Your public key guarantees you are you, so long as you control your private key. Then comes the part that ties it all together: the blockchain.The blockchain is an unbroken chain of blocks, each block building on the previous block, so that if the value of any one block is altered the nature of every block that comes after it changes also.

Why is this a revolutionary development?

In each block, the actions of your public key are recorded and once recorded, become completely and utterly immutable. They cannot be changed. It is a permanent record of your public key. It is also public, accessible by anyone, anywhere, at any time, including you. This means that you always know what your private key is doing, via the trail left by your public key. If you lost control of your private key, you would know when and where it was being used and for what. You would be notified if someone was trying to impersonate you and you could invalidate your public key, instantly. This would make it impossible for anyone to further use your public key to impersonate you.

So how is this a democratic tool? For the first time in history we have the ability to guarantee that each individual has a voice, and that voice is not impersonated. We can guarantee one vote per person and we can guarantee that it is that person casting the vote.

Let’s look at a nascent example, currently operating:

Bitcoin mining is the act of processing transactions on the bitcoin network. There are thousands of miners around the world, all collectively trying to process various transactions. Although not widely utilized currently, miners have the ability to accept or reject certain transactions. They can choose to refuse to process transactions. Let’s think about that for a moment. An individual miner can choose to not process a transaction, but someone else will, therefore that individual miner’s choice doesn’t make a lot of difference. But what if more than half the miners decided to stop processing transactions from an entity they disagree with? Now the choice of those miners has an impact. If more than half of the network decides something does not belong on the network, the transactions will never make it into the blockchain, effectively being ignored by the bitcoin universe.

The impact of this may not be readily apparent until you stop to consider the fact that each miner has a vote and if enough miners agree with you, it becomes law and is enacted immediately, without delay. If things change in the future and less than half agree with your vote, the law is repealed instantly. No red tape, no debates, no politicians. Just pure mathematics driving the desires of the participants. This is the basis of democracy and is the ultimate expression of it. One vote per person, guaranteed. Now, bitcoin mining has some other factors thrown in that make this an imperfect analogy to a true democratic process, but the fundamental underpinnings are there and they are working.

It truly is the ultimate democratic tool.

Josh Zerlan is VP of Product Development at Butterfly Lab.

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