David Z Morris in Aeon (Photo by Gallery Stock):
Though retailers and service providers adopted Bitcoin en masse in 2014, financial servicers have been much more cautious. What this means is that there are still very few ways for users to convert Bitcoin or other cryptocurrencies into traditional currencies or commodities.
Partly in order to work around this, the BitShares trading platform offers participants no ownership of the commodities they’re nominally taking positions on. Instead, Larimer describes it as a ‘predictive market’, in which participants set commodity prices by taking positions – or, put more directly, by placing bets. BitShares is, for now, a digital version of the 19th-century bucket shops where the working classes would go to bet on stock‑market moves. This form of speculation is illegal in most US states, including Washington, California and Mississippi. But that could change quickly. As digital cash becomes integrated with more and more services, DACs [Distributed Autonomous Corporations] such as BitShares will almost certainly find ways to interface with real-world markets for gold, dollars and goods of all kinds. If those connections expand, the possibilities of DACs will expand with them.
Imagine, for instance, a bike-rental system administered by a DAC hosted across hundreds or thousands of different computers in its home city. The DAC would handle the day-to-day management of bikes and payments, following parameters laid down by a group of founders. Those hosting the management programme would be paid in the system’s own cryptocurrency – let’s call it BikeCoin. That currency could be used to rent bikes – in fact, it would be required to, and would derive its value on exchanges such as BitShares from the demand for local bike rentals.
Guided by its management protocols, our bike DAC would use its revenue to pay for repairs and other upkeep. It could use online information to find the right people for various maintenance tasks, and to evaluate their performance. A sufficiently advanced system could choose locations for new stations based on analysis of traffic information, and then make the arrangements to have them built.