Now Accepting Bitcoin… Again
Way back in early 2016, we released our first premium WordPress plugin, Well-Handled Email Templates. Because of its heavy developer focus, and because we’re nerds, we decided to spend a little extra time integrating Bitcoin payments into the checkout process. Compared to credit cards, Bitcoin transactions have lower merchant fees (good for us), no foreign transaction fees (good for you), and a fun little QR code you can scan with your phone. A clear win, right?
And yet, not a single license was ever purchased using this futuristic, fiat-free exchange medium.
Later that year, we began planning and prioritizing features for a sexy revamp and consolidation of the Blobfolio web empire. Bitcoin payment support, being time-heavy and return-poor, got iceboxed, and our new site ended up launching without it.
Well It’s Back
Over the weekend, Björk added Bitcoin support to her website, and so did we. Independently. But hey, great minds think alike!
And that sweet, sweet Bitcoin money has been rolling in ever since?
No. Still zero sales.
So why did you waste the time adding a feature nobody uses?
One word: Potential.
The Future, Duh.
We’re living at a turning point in history, one as radical and far-reaching as the birth of the Internet (remember that one?!). Bitcoin is a key figure in this revolution, though not necessarily for reasons you’d expect. Bitcoin’s most important idea isn’t about currency; it’s about decentralization.
(Don’t worry, this article isn’t about to devolve into some anti-establishment manifesto.)
Our interest in decentralization is about something else: security.
Centralized storage — of anything, be it records, data processing, communications, energy, banking, real estate, census data — provides a central point of failure. Failure can take many forms, from accidental data loss or corruption to malicious tampering to the outright weaponization of critical infrastructure. It is a serious problem, and one upon which our current society is dangerously built upon.
So, like a wise man once said, we need to “spread [it] out.”
There is no Bank of Bitcoin, nor is there any Visa-like institution processing Bitcoin payments. Bitcoin’s full history — its transactions, account balances, everything — lives on a transient data structure called a blockchain.
The blockchain can be copied, stored, altered, and verified by anybody anywhere anytime, but the blockchain is shaped by consensus, a common history agreed upon by a majority of participating nodes. New transactions are clustered into blocks, which once adopted by a majority, become reality. This reality, once real, cannot be changed, as each block contains cryptographic hashes comprising its data and the data of nearby blocks.
Sorry, did I lose you?
Let’s boil this down further: Consensus and Cryptography. Those are the key ingredients that can save us from the dangers of monolithic, centralized control.
Say you live in a democratic country that allows its citizens to cast electoral votes electronically. Every citizen stops by a kiosk, enters a unique identifying voter number, and presses a button for White Guy #A or White Guy #B.
Traditionally, such a system would rely on a centrally-controlled database, presumably held under lock and key by some government agency. No matter how many access control structures are added on top of this, the centralized nature of the information leaves it vulnerable to manipulation. Maybe the government itself is dishonest. Maybe enemies of the state are holding a system administrator’s dog for ransom. Maybe a rogue neutrino from the sun managed to knock a critical hard disk, transforming a 1 to a 0. Or maybe someone has gotten into a voting machine, causing it to vote incorrectly.
Ultimately, there is no way to definitively say, These Results Are Truth.
Now, imagine instead that such a system were built on a blockchain (or some other decentralized ledger system, like a Merkle tree).
Under such a system, eligible voters would each be issued a token representing their vote. That token would be “paid” to the account of one white guy or other accordingly. That transaction would be independently verified, processed, and recorded by computers all over the world, some run by this government, some run by other governments, but most belonging to universities, citizens, and other interested parties. As consensus builds, the results grow more confident, until eventually, we have Truth.
Let’s go back to our hypothetical attacks:
- Dishonest Government: nope. They’d have to not only alter the transaction histories of computers under their control, but also a majority of all the other computers holding copies of the data, many of which we’d assume would be held by equally powerful nations.
- Kidnapping and Coercion: nope. There are no privileged people to threaten.
- Neutrinos and Miscellaneous Data Failures: nope. If a block gets corrupted, it won’t validate, and neither will the subsequent blocks.
- Hacked Machines or Misinformation: maybe. There needn’t be dedicated voting kiosks — votes could just as easily be cast from wallet-like software on their personal computers — but that doesn’t really eliminate the possibility of viruses, malware, or outright lies tricking users into “paying” the wrong person. However, such incidents could be reconciled after-the-fact because every transaction within the blockchain is identifiable and verifiable, by anyone, anywhere, anytime.
Back to Bitcoin
Bitcoin, through its domination of the cryptocurrency market — which, by the way, exceeds the market capitalization of American Express, PayPal, FedEx, and many other major institutions — has done more to popularize the concept of the blockchain than anything else.
Whether it ultimately succeeds or fails at being a currency is irrelevant.
It has paved the way for the future.