by Jerry Brito
Reason Foundation
December 19, 2013
At its core, Bitcoin is a completely decentralized ledger system. It can be thought of as a massive online version of an accountant's book in which transactions are recorded by deducting from one account and adding to another. An accountant's ledger can be used to keep track not just of dollars, but also cows or bushels of corn or anything else, and Bitcoin is just as flexible. That means it can serve as the backbone for any online transaction that relies on a ledger, such as property registration, futures swapping, and bonded contracts. Because Bitcoin is decentralized, these applications can exist largely outside regulators' reach. And because Bitcoin is growing in popularity, financial regulators are beginning to make plans for dealing with it, much to the chagrin of those who see the private currency as a revolutionary force inherently unmanageable by statist forces.

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