Institute For The Future

Cryptocurrency: a new way of organizing and shaping the world

For centuries we have relied on traditional forms of currency, managed by a central authority, for our daily transactions. Money, and the systems that govern its creation, limitation, and transfer, are now being radically rethought. The future implications of this shift are nothing short of revolutionary.

Cryptocurrency—as this new form of money is often called—is a medium of exchange that stores value in digitally encrypted data. This stored value can be securely transferred between parties, similar to how money can be spent with a debit card. However, there are two big differences between cryptocurrencies and traditional fiat currencies. First, the infrastructure for transferring cryptocurrency is an open-source peer-to-peer model, rather than a centralized, proprietary model. Second, anyone with a computer and an internet connection can “mine” currency for themselves by running the peer-to-peer software. This is akin to mining from a scarce supply of minerals in a virtual world by contributing computing power to the system.

Cryptocurrency isn’t just about a new form of money. It’s about the basic frameworks beneath Bitcoin, Etherium and countless others that allow innovators to create new networks of exchange for many different kinds of assets, under many different kinds of terms. Thanks to the open-source designs and built-in verification systems of these currencies, so much is now possible: instant payments or donations can be made across nations at low cost, extremely small micropayments can be exchanged, communications can be securely and efficiently read by only intended recipients, and autonomous contracts can be developed from the ground up.

In the future, we can even imagine physical objects with embedded protocols for sharing and transferring ownership. We can envision continuous payment systems for small contributions made everyday toward building shared infrastructure or assets. Entire corporations will be turned into algorithms driven by digital contracts. Companies will soon provide just as many services for these distributed networks as they did following the introduction of the internet. 

With this shift in power from institutional authorities to groups of peers come some inherent tensions. Certain government authorities are concerned that these routes will be the basis for trafficking illegal goods, or will challenge national currencies. The U.S. bankruptcy of Mt. Gox, a popular currency-to-cryptocurrency exchange, is a sobering reminder that early organizations in the space are likely to come and go.

Beyond the hype, the scandal, and the early failures, there still lies the promise of a new way of organizing and shaping the world. And it’s only just beginning.

Learn more at our Cryptocurrencies +Tech event!

On March 27, IFTF will host a panel of fantastic experts to learn more about the promise of cryptocurrency as part of our +Tech series. Registration is free, but seats are limited. Sign up today! We'll also post videos of the talks on the event page, and you may follow online at #plustech.