The Bitcoin Big Bang: How Alternative Currencies Are About to Change the World

Chapter 11 Smart Money: Set It and Forget It

I think the Internet is going to be one of the major forces for reducing the role of government. The one thing that's missing but that will soon be developed is a reliable e-cash.

—Milton Friedman

Ron Popeil made a fortune with a chicken roaster and a phrase: “Set it and forget it!” The Showtime Rotisserie made life easier and solved the problem we all have—not enough time to cook a healthy affordable meal. With his rotisserie and a phrase, Popeil promised that you could make a delicious and healthy meal in two easy steps. Once you prepared the chicken, you simply set the machine in motion and forgot about it until the timer buzzed. You can do something similar with Bitcoin. No, it will not cook a chicken, but you can “set it and forget it.” Through the smart money features of Bitcoin, you can literally set up a transaction and forget it—the Bitcoin software does the rest. But wait, there's more. You can also attach a contract or property to the transaction and the Bitcoin network will verify that you own it and transfer it when you want to whom you want.

As these pages are being written, entrepreneurial coders are hard at work on features called smart contracts and smart property. Smart contracts are legal documents that are attached to a bitcoin transaction. These contracts stipulate who to pay, when to pay, and what is being exchanged—and they are incredibly efficient. Also, since the bitcoin transaction is irreversible and ...