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I would first like to preface this by saying that it is a relatively advanced discussion of bitcoin. If you do not understand the basics of what bitcoin is, then it will likely not make much sense to you. For the absolute basics on the bitcoin currency app, feel free to read my Bitcoin: Getting Started thread. If you understand everything in there and want to research and move to the next level, this post will provide my initial thoughts and then this thread will hopefully develop from there. Explaining a New Technology Using Bad, Old Terms It is one of the banes of any new technology that you have to explain it in terms of something that already exists. As many of you have figured out by the terms used around bitcoin, about none of them actually apply to bitcoin. For instance, bitcoin is not a coin. You don’t have a wallet full of coins. You don’t even send coins really. Bitcoin is a store of value that is cryptographically embedded on a distributed ledger. This ledger uses Proof-of-Work (POW) to verify and confirm transactions. Bitcoin is just numbers that move around on the ledger. They can only be spent when a mathematical signature says the coin is now located at a new place in the ledger. Simple, right? Not at all! Bitcoin makes no sense to people who are new to the idea. Even using “old” terms, bitcoin is still confusing and leads to many people criticizing it according to old standards which do not apply to bitcoin. It makes things very difficult to explain. Thus, all of these old terms that do not apply exactly need to be used in order to analogize bitcoin with our existing ideas about money. The TWO Meanings of Bitcoin This brings me to the bitcoin name itself. The truth is that Bitcoin the network is just a distributed proof-of work protocol. On top of this, we have the application called bitcoin that is used as a exchange of value system. What This Means Bitcoin the network will very quickly have a lot built on top of it. Think about the internet. You have TCP/IP as the base protocol. On top of this, you have built the HTTP protocol. On top of this, you have many browsers that you use which bring these complexities to the "user" level. On top of this, you have the various apps and plug-ins which bring things down to an "individualized" level. Bitcoin is exactly the same. In fact, several years from now, very few will know what bitcoin is but they will use it- or a derivative- every day (similar to how few know what TCP/IP is, but use it every day). The Next Layer There are a few companies popping up that are trying to build the next layer. Mastercoin is one that is just starting. It would allow titles of property, assets, stocks, bonds, etc to have registered ownership titles in a distributed system. It would also allow anyone to make their own “coins” for a project or for themselves in order to parse out value, or stake in a project or company. I am not aware of others, but I am sure that a few may exist and the next couple years will see a lot of development in this area. Beyond That There are many places where bitcoin could go, but in time there will be many layers of apps on top of the system that the technical knowledge you currently need to use bitcoin will be silly and obsolete for the average user. Things will become second-nature and basic exchanges will happen instantly without much thought. Advantages of Bitcoin Revisited Thus, besides the many, many advantages of lessened counterparty risk and lessened third party risk and lessened overhead and lessened centralization and increased anonymity and more that bitcoin the current realization of bitcoin the currency provides, these things can be applied in the future to all assets, transactions, interactions and more. The limits are only in the imaginations of entrepreneurs as to where bitcoin can go. This post as a bit shorter as I do not know as much about the topic as it is new, and that it introduces a lot of new topics and ideas even to people who are potentially familiar with bitcoin the currency. If you have any questions, trouble, additions, or edits, feel free to ask them and I will try to respond as best I can. Also, if you want to see another post or topic about bitcoin, you can PM me or add it below and I will research or put something together- especially if I think others would benefit from the post. Thanks for reading!