In their HBR Blog post Bitcoin’s Promise Goes Far Beyond Payments, Tiffany Wan and Max Hoblitzell explore the technology aspect of Bitcoin. Now we all understand that it is being treated as a virtual currency and may become the first universal currency in the connected world led by the Internet. It would enable people to exchange monetary value without involving any external agencies and hence saving on the costs involved in these transactions. If it becomes mainstream – even for online transactions, the established authorities will feel the heat as they will start loosing revenues. However the authors of this blog point out that if we look at Bitcoins as more than just a currency, as a unique piece of technology, there are many more things that it can accomplish like be an identity document for people, that can potentially replace the need of multiple identity documents like passports etc. The digital identity can verify people at the borders. Similarly the contracts can be exceuted through Bitcoins, be it for property deals or for selling used cars. Now we know the digital information is easy to store and retrieve, which means this concept will bring about a lot of transparency and speed.
The question that it raises for me is the security – what if my identity is stolen or transactions are done on my behalf, what would be the way to decipher fake transactions and what would be my fate if my identity is stolen. What if the details of all my transactions ever are available to people I do not want to know all about me. This is my fear at an individual level, what if identities are stolen for a whole community – can you imagine the chaos it would lead to.
I know technology can potentially close these loop holes, but we must remember that the ease with which you get a solution is also the ease with which hackers can get into the system.
However and interesting thought process that definitely needs to be explored.