As the price of Bitcoin and other cryptocurrencies shot up in 2017, the myths and rumors surrounding blockchain have again triggered a number of mixed responses, ranging from the firm faith in anarchism founded by Satoshi Nakamoto in 2009, to the heroic sentiment to change the world with technology, or to the greedy desire inspired by stories of people accumulating vast riches overnight through bitcoin. The only way out of the conundrum is to review the essence of blockchain, to understand the foundation underlying the disruptions that it is causing as well as the accompanying challenges—for they are the two sides of blockchain, the sources of optimism and criticism respectively. The aim of this article is to analyze both sides and provide a new perspective for a world in the midst of a blockchain fervor.

Digital currency rose to its prominence in 2009, marked by the birth of Bitcoin. The following seven years saw the burgeoning of a 10 billion dollar worth Bitcoin global network, which leads to more discussions from central banks around how to keep up with the trend both systematically and technologically. Debates on the legitimacy of digital currency never end, with speculation around possibilities of its replacement of fiat money, an ensuing prospective governance mechanism and its function akin to that of central banks. If these bold assumptions failed, can this monetary innovation work as a compliment to central bank policies and currency system? This article will look into the above possibilities and assumptions on the basis of existing researches, technologies and regulations, in hope for an all-round thinking and further discussions without giving away any affirmative conclusion due to the complicity of monetary system and early development of digital currency.

Rapid technological upgrades and commercial innovation, coupled with a slow legislative and regulatory process, have given rise to successive social issues and disputes: Should platforms like Uber be legalized or not? Should Apple’s encryp…