"Bitcoin Accepted," said the sign at the makeshift lemonade stand, staffed by a serious tween.
"Yes," she said.
"Will cash do?"
She shrugged as I handed her $2, two classic greenbacks.
"It's changing the world," she said. "Bitcoin."
I had not set out that morning thinking I would soon be discussing a disruptive cryptocurrency with an entrepreneurial tween. Until that conversation, Bitcoin to me had been geekery tinged with stories that belong in novels: Bitcoin equalled mystery, money, and monkey business.
Why? Three reasons: (1) Like bees to a honey pot, Bitcoin enticed screen-focused crypto-geeks to pay attention—some even left their dwellings to walk on the wild side with actual humans; some actually attended in-person meetups and discussion forums (2) Bitcoin has an inventor who avoids the limelight and may not even exist, and (3) Bitcoin is associated with under-the-radar transactions in the black markets of the "Dark Web" and the "Silk Road"  and with innovative malware and distributed denial of service (DDoS) attacks and ransom demands.
I was more inspired by the Bitcoin-admiring tween. So I did some research. Bitcoin truly is more interesting than I expected. In fact, its underlying architectural innovations could mean significant changes in service and interaction design in the future.
Bitcoin was created by geeks, not by the usual suspects of transaction management—lawyers, policymakers, and banking regulators. A virtual currency, it implements core concepts from cryptography: private-public key encryption and cryptographic validation of transactions through consensus-based proof mechanisms.
So what does all that mean for everyday consumers like you and me? The biggest change is likely to be the reduced reliance on the central intermediaries and gatekeepers that currently manage trust . According to (alleged) Bitcoin inventor Satoshi Nakamoto, the currency offers a peer-to-peer version of electronic cash to allow online payments to be sent directly from one party to another without going through a financial institution . Peer-to-peer because, rather than storing transactions on any single server or set of servers hosted by a single entity like a bank, Bitcoin is built on a transaction log distributed across a network of participating computers, meaning that transaction proof is recorded in a permanent and highly distributed public record. This transaction log—the "blockchain"—is where Bitcoin's disruptive potential lies. With no central server, there is no single point of failure. Many verification parties are involved. It is claimed that the network is protected because no hacker has enough computing power to change all the records that would be needed to create counterfeit bitcoins. Replacing centralized transaction management, Bitcoin creates what have been called "trustless transactions," replacing trust in legitimizing institutions like banks with "trust in code" .
This underlying infrastructure has potential for the redesign of all kinds of established forms of transaction and exchange, not just financial exchanges. And that, in turn, has consequences for us as designers of systems that create, enable, and mediate arrangements of people and things.
For example, a distributed, secure infrastructure like this enables decentralized business logic, leading to the creation of "smart" or "self-executing" contracts , which are represented as cryptographically encoded "boxes" that unlock only if certain conditions are met. No person or institution need be involved to mediate and manage the transaction. Consider a service like IFTTT, which allows us to create conditional if this then that–style "recipes" such as "If I upload a picture to Flickr, then also post it to my Facebook page" . Mechanisms like these can be put in place to verify your assets or check for conditions before a transaction can be completed. Every time a condition is met, such as some agreed-on action is taken, the result is automatically and irrevocably executed. Examples could be that money moves from my account to yours, you gain entry to my house through my digital lock, you gain access to legal documents, your stocks are sold... and so on. If you die, your death certificate is communicated to a management system through a pre-established protocol, resulting in any assets you have bequeathed being distributed to your heirs according to your will. No intervention from lawyers. Betting who will win the next World Cup? The score can be the trigger condition for the execution of the contract, the exchange of the wager.
The new world of the Internet of Things could also be the new world of smart contracts. Wanting to pay for that new camera? No need for an intermediary marketplace—the transaction-completion trigger could be the ON switch or the first image you download, which then initiates payment. Defaulted on your car-loan payment? Your car may not start the next time you get in it and try to drive away. And of course, there will be many new ways of establishing reputation and legitimacy and many changes in how fees are determined and charged.
Bitcoin's underlying architecture is being replicated in domains other than finance, for example by companies like Ethereum and Codius, which focus on enterprise content management. This could be a significant enough shift in infrastructure to set in motion a disruption in contemporary social and technical arrangements and organizational forms around contracts and exchanges. As Geof Bowker and colleagues have pointed out in their discussion of infrastructure studies, "infrastructure design makes some things possible and creates barriers for others" and demands consideration of "what will be shared, what systems will be open and what closed, what is proprietary, what standards are at play..." .
Arguably, what interaction and interactive designs are plausible and/or possible will also shift. Think about other major shifts in the past few decades: The Web changed the way we think about content production and dissemination; hypertext changed the way we think about the interconnectedness of content; and the Internet of Things is changing how we think about "thing-ness," information, artifacts, and agency. In this vein, the kinds of decentralized transaction management and content storage that Bitcoin has brought to our attention may have the potential to change the way we think about all transactions and exchanges in the future, from bits and bytes to coins and consumables.
This rethinking of the relationship between agents and stakeholders, as well as how that gets played out in interaction design, is exactly what we as designers like to work on.
The future, once again, is intriguing and exciting—as I learned from an entrepreneurial tween. Smart girl.
1. There has been much written about this: https://en.wikipedia.org/wiki/Silk_Road_(marketplace)
2. Companies are realizing this and emerging. Ethereum (https://www.ethereum.org) and Codius (https://codius.org) are two examples of emerging platforms that are targeting a far bigger revolution than currency.
3. See the original paper published by Satoshi Nakamoto in 2008: https://bitcoin.org/bitcoin.pdf
5. First proposed in 1994 by Nick Szabo, who offers examples of smart digital contracts and smart physical objects too: http://szabo.best.vwh.net/smart.contracts.html
Originally from the U.K., Elizabeth Churchill has been leading corporate research at top U.S. companies for the past 18 years. Her research interests include social media, distributed collaboration, mediated communication, and ubiquitous and embedded computing applications. email@example.com
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