Blockchain can be the legal and financial system of the digital age

Over past 20 years, a digital world has been built and woven into our world. We use it to summon cars, talk to grandma, arrange industrial logistics, and advertise shampoo. This entire world is made of nothing but code. It all looks like this under the hood:
https://commons.wikimedia.org/wiki/File:Visual_Studio_Code_0.10.1_on_Windows_7,_with_search.png

Bitcoin is the first kind of money made entirely of code. It allows programmers to manipulate money with the same flexibility and reliability they use to manipulate information. They can split it, merge it, send it around the world, assign percentages to different beneficiaries, pay dividends, anything you can imagine. It’s programmable money.

This is very different from paying online with a credit card. Online credit card payments are a new portal to an old system, the system of banks and nation-state currencies. Cryptocurrency is a new, independent system, and brings with it new ways of organizing human activity.

Ownership of assets and businesses in the legal and banking system is limited to a handful of forms (the public company, the private trust, the non-profit, and a few others) and if you want to do something that doesn’t fit those forms, you’re out of luck. (An example was equity crowdfunding; when sites like Kickstarter became popular, a lot of people were interested in the idea of rewarding backers with a share of later profits. But found there was no legal structure that allowed that.)

But the quality of the new system that really has people excited isn’t flexibility; it’s transparency. A computer program does nothing but read the next line of code and faithfully carry out the instruction. Wouldn’t it be nice if the banking system did nothing but faithfully carry out the agreed-upon instructions? Cryptocurrency enables something called a smart contract; a code that parties agree to, that self-exectutes instead of being executed by some corruptible human.

The real promise of blockchain isn’t as a get-rich-quick scheme; it’s a new way of organizing society that removes the possibility of corruption, enables a greater range of structures, and is quicker and more efficient too. Enough people, with enough money, are interested in this vision that a significant industry has formed around building it. Things are just getting started.