Susan Athey: What is the state of bitcoin and blockchain technology as of early 2016?
Three years ago, institutions scoffed at the idea of decentralized solutions to storing items of value; instant settlement was predicted to be at least a decade off in the future; and the idea that a nation would move to entirely digital currency seemed like science fiction. Bitcoin was a proof of concept that inspired the imaginations of engineers, entrepreneurs, and innovators all over the world; and it also served as a catalyst for an industry that had been resisting innovation as it was bogged down by and distracted by regulatory compliance and recovering from the financial crisis. The industry went from saying “we’ll never all be able to coordinate on technological changes” to “if change is coming, I want to be a part of it.” In my view, the importance of a catalyst for action cannot be understated, especially when dealing with large, conservative firms with disparate interests.
.. One way to think about it all is like the beginning of the internet. Early on there was a lot of discussion of protocols, packets, etc., but it took many years and many layers of services on top before it was useful. And the first commercial uses had a lot of questionable elements (policy-makers in the 1990s were alarmed by the pornography and use of the internet for criminal activity).