tl;dr: Autonomous software and machines are coming soon. They will transact with digital currencies.
Imagine the following, all of which is possible today:
- Someone anonymously writes a software application that accepts payment in bitcoin. Let’s say, trivially, a joke-of-the-day site that sells you a joke for $0.01 worth of bitcoin.
- Imagine that this app is hosted at a webhost that accepts payment in bitcoin and it is programmed to pay its monthly hosting bill with the bitcoins it earns. For the purposes of this exercise, let’s assume it is profitable.
- Then, the software developer vanishes or dies.
- At that point, for the first time in human history, a human invention will autonomously engage in economic activity without necessarily having, ultimately, a human owner.
Today no business operations can outlast your death without being transferred to another human owner because the financial system is ultimately tied to natural people. Dave Winer talks about this all the time in a different context – how can you reliably maintain a memorial website and domain name that outlives you? – and correctly concludes that there are no satisfactory answers today.
If it is an operation held personally, your bank will eventually suspend your accounts once they realize that you are dead. Even in the event of a corporation or a non-profit, there are still real-life breathing people who elect or appoint the Board of Directors or Board of Trustees that sign on the behalf of the corporation. Ultimately, there is always a human in the mix to provide interaction with the existing financial system.
Bitcoin does not work this way. You could embed a bitcoin wallet into an application and set it free into the world, either pre-loaded with bitcoins or with the ability to earn them. And bitcoin wallet does not know and does not care who its ‘owner’ is. It will work fine under all scenarios.
There will be an explosion of autonomous or semi-autonomous software and hardware that will come into being over the next twenty years, from smart appliances negotiating electricity rates with utility providers to self-driving taxis to software agents executing complex missions. As they get more sophisticated, they will need to purchase items autonomously from computing services to, say, gas. And they will do that with bitcoins or some future similar currency.
For the full bitcoin series: ledracapital.com/bitcoin
Twitter: @polemitis and @ledracapital
Ledra Bitcoin Digest email newsletter: ledracapital.com/subscribe