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Bitcoin could change the world, even if it crashes

The best thing about cryptocurrencies may be the blockchain technology they are built on

The price of digital currencies like bitcoin, litecoin, ethereum, ripple and others have been all over the map in recent months, soaring over 1,000 percent before falling sharply amid government intervention in Asia. The get-rich-quick appeal of "cryptocurrencies" has everyone from flashy music stars and Hollywood actors to Wall Street and average investors climbing aboard the craze.

Within what many experts see as a classic market bubble, however, lies a potentially revolutionary innovation. That technology, saddled with the unfaddish name "blockchain," could change everything from how people make payments online, to how countries fight corruption, to the very relationship between government and citizens.

The upshot: If the price of bitcoin were to crash to earth tomorrow, blockchain would likely outlive it -- and continue to reshape the world in myriad other ways.

"Blockchain is the technology, and bitcoin is one application of the technology," said Jen Schwartz, a senior features editor at Scientific American. 

A framework for data

At its simplest, blockchain is a way of structuring data -- a framework. The creator of blockchain, a person calling themselves "Satoshi Nakamoto" whose identity remains anonymous, invented blockchain in order to create a currency that is independent from a central authority. But in the process, Nakamoto invented a way to securely transmit data in a way that it is indelibly recorded.

"Blockchain technology can be used to keep track of and transact any data beyond bitcoin," said Schwartz, who edited the magazine's recent issue on the future of money. "The idea is that instead of intermediaries deciding if something is valid and keeping it secure, math and machines are taking on that role."

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