Crypto currencies like Bitcoin have had plenty of press coverage, and have been characterised both as a 'South Sea bubble' going nowhere or as key financial technology and fiscal disruptor - in some cases by the very same people, separated only by a little time. [See also: Blockchain - A disruptive force for good?]
As soon as precious metal coins were replaced by promissory notes (that fiver with "I promise to pay the bearer" written on it…), the direct connection between a currency's value and its ease of use was broken. Crypto currencies take this financial journey to its final destination; where a digital currency has no intrinsic value and is entirely valued by its limited availability, robust identity control and ease of electronic transfer.
Crypto currencies offer digital disruption opportunities. So just as digital music services challenged the traditional business model of music distributors, crypto currencies are likely to challenge the models of a financial services sector that is rather too used to earning healthy commissions in exchange for moving invisible assets around.
Bitcoin is the best known of today's Crypto currencies. It has exhibited wild fluctuations in value (from over $1,000 at the end of 2013 to $250 now), and has also had to deal with other difficulties - some caused by being especially popular in the kind of places that might prefer a currency outside the control of any nation state.
Bitcoin is, after all, a peer-to-peer managed currency, with no ownership or financial support and running on a very powerful distributed platform.
However, the real disruptor here is not the currency but the platform it runs on: the underlying protocols which make it all work. It is acknowledged (by most), that Bitcoin's contribution may be more in promoting a new kind of secure peer-to-peer network and the safety measures built into its open, shared ledger of transactions, collectively known as the 'blockchain'.
The blockchain is a secure, openly replicated and distributed, ledger of every Bitcoin transaction ever executed. In addition to this data being openly shared amongst all participating services, there is a mechanism to constantly identify discrepancies and test them across the entire network, automatically identifying and overriding illegitimate transactions as it goes.
There are, of course, potential disadvantages to any technology. Most obviously, the blockchain is a file of constantly increasing size as new transactions are added to an existing complete record every 10 seconds. And without an owner or monitoring body, what happens if things go wrong? Set against that, the blockchain has already demonstrated huge value in providing a complete record of transactions registered against fixed, unchangeable, digital identities.
It is because of this strong digital identity feature and the technology's robust unforgeable nature that the technology has been earmarked as a potentially powerful platform for many kinds of value-based transaction. Examples cited include property transactions, stock exchange trades, voting systems and perhaps even defining and storing digital identities in an increasingly mobile and dispersed world - a recent summit hosted by Richard Branson on Neckar Island explored the implications of this application in more depth.
So it is likely you'll see more and more talk in tech circles about the blockchain, whatever the future and value of the Bitcoin currency which spawned it.
As a result of the technology's appeal, more and more mainstream banking and financial tech companies are exploring such technologies to see how they might ally to them and use the technology. And if mainstream financial transactions do eventually take using such peer-to-peer systems, organisations whose wealth is predicated on providing intermediary services for the safe transfer of value may need to look elsewhere for their margins.
Which brings us back to our loose analogy of how music distributors, who were used to a comfy retail network where they could control the sale of CDs to earn money from artist's work, had to re-evaluate in the face of disruptive new distribution technologies. At the same time, artists, used to the restrictions and security of a sponsoring 'label' were set free to find new ways to reach and monetise their audiences.
All of which is why Wall Street and major finance houses like UBS and Barclays are now talking about Bitcoin and Blockchain; its why today there are blockchain hackathons to find new and innovative ways to employ the underlying technology; and why there are suggestions that nations on the edge of financial collapse might consider these technologies as a way of continuing to operate outside any established banking system.
The process of separating blockchain technology from the Bitcoin entity which spawned it may not be easy, especially for those who 'invested' early in Bitcoin, but it's a process many vested interests are clearly trying to encourage. 'Disintermediation' was a word much favoured in the early days of the internet to describe the removal of unnecessary layers and costs by application of new distributed technologies – here's one example which could have far reaching effects for us all.