Politically, Bitcoin owes more to the libertarian right than the libertarian left. It has the double attraction of independence from state control and a strictly-enforced limit on the number of coins in circulation, thereby avoiding the possibility of the currency being debauched by a fiscally incontinent sovereign. The advance of bourgeois oligarchy in the Early Modern period is often presented in Whig history as an attempt to restrain monarchical waste and resist the expropriation of private property. In the Modern era, latter-day Whigs have presented democracy as a danger to the public purse - the looting of the treasury - which requires that the better sort step in and manage the process. Regulating the sovereign and regulating the people are two sides of the same coin.
Culturally, Bitcoin owes something of its popularity to its metaphorical near-equivalence to gold, which is most obvious in the role of the "miners" who provide the computing power that simultaneously generates new coins (essentially through trial and error processing and at a fixed rate) and maintains the distributed ledger that obviates the need for a central authority. These miners exhibit all the mistrust and paranoia typical of the stereotype made famous in The Treasure of the Sierra Madre, though we shouldn't automatically assume they all have beards and poor personal hygiene. Though "mining pools" (in which miners combine efforts to increase their chances) have arisen, these only work because double-crossing is ruled-out by the distributed controls of Bitcoin itself. This is a trustless network by design ("Badges? We don't need no stinkin' badges!").
The real significance of Bitcoin is not its use as a crypto-currency, i.e. reliable money, but the potential of its architecture - specifically the "blockchain" - to create a distributed environment for the management of all types of property claims (money is just one type), and even for the execution of contracts (Ethereum is the poster-boy for this concept). A "contract" in this sense is merely a transaction that can be verified, which means that the blockchain approach (in which blocks of transactions are chained together to create a fully-auditable ledger) can be used to support decentralised applications (or ÐApps) that can run across multiple nodes in a trustless, peer-to-peer network, so avoiding the need for either a logical or physical central authority (i.e. either a master database or server). The blockchain is the bastard offspring of Napster and DRM (digital rights management).
This may be a bit abstruse if, like Dido Harding of TalkTalk, you don't know your arse from your SQL, but the political point is the removal of the central authority. Bitcoin is celebrated on the libertarian right because it potentially does away with central banks specifically, not just banks generally, but the blockchain concept also has the potential to do away with a variety of other authorities and regulators. Though this is usually discussed in terms of property claims, such as title deeds or copyright licences, it could just as easily be extended to something like voting (i.e. to prevent rigging and personation) or national insurance contributions. In other words, this potentially goes well beyond automating the role of notaries. Both the ballot box and the DWP could conceivably be replaced by blockchains.
The challenge this presents is that the algorithms that maintain the blockchain have to be quite rigid otherwise you could compromise the integrity of the ledger as a record of historic transactions. In other words, you cannot easily change the rules of the game once you've started. This has attractions for constitutionalists (i.e. Burkeans who feel the past should trump the future) and those who suspect central banks of always wanting to create too much money. It also sits easily with property rights, where not changing the fundamental rules is the object of the game. The problem comes in respect of pro-social contracts where changing the rules is considered desirable across the political spectrum (e.g. Ian Duncan Smith's introduction of Universal Credit). Blockchains are not suited to pro-social contracts because they do not easily allow for the evolution of social relations.
One vision of the future economy sees corporations becoming increasingly abstract, as technology allows them to replace labour and disperse traditional overheads. In theory, a business providing digital services (e.g. recorded music) could be wholly accommodated within a blockchain, the individual transactions recording not only sales and royalty payments but securely holding the digital products as well. Though this lowers the cost of business, it would be naive to assume that it will in turn diffuse capital - i.e. that it will make it easier for us all to become capitalists. The winner-takes-all dynamic of the digital economy, like the emergence of Bitcoin mining pools, suggest that capital will continue to concentrate whenever possible. Amazon Web Services is still a more likely template for the future than Bitcoin, if only because few of us wish to become miners.
One interesting strand of speculation around decentralised applications is the intersection with the Internet of things (IoT). Hype-merchants like IBM are already eulogising the "democratisation" of blockchains: "Successful decentralization of the IoT, however, will lie not just in being peer-to-peer, but also in being trustless: an environment in which there is no need for participants to be trusted and no centralized, single point of failure ... In our vision of a decentralized IoT, the blockchain is the framework facilitating transaction processing and coordination among interacting devices. Each manages its own roles and behavior, resulting in an 'Internet of Decentralized, Autonomous Things' – and thus the democratization of the digital world".
It is unlikely that the IoT will deliver a single, common network of trustless, peer-to-peer devices simply because of the challenge of scale - i.e. the size of the ledger and the disparate interests of its components. It's more likely that we'll see the creation of self-selecting "communities" based on specific devices (and thus commodities) and social or geographic affinities, probably geared to shared security and maintenance, like a cross between Neighbourhood Watch and the Apple cult. IBM's vision has a dystopian edge: "Rules could also be defined by 51 percent consensus, as in the case of devices agreeing on the safety of peer downloadable software updates or banning a misbehaving participant". Though the blockchain is being heralded as a secure means of maintaining a common agreement among multiple devices, what it also promises is a grammar that would allow property to talk among itself.
If we think of the blockchain as a substitute authority, it may turn out that one of its chief uses will be to control a household, which may in practice be a virtual establishment spanning multiple physical locations. The Internet then is simply a means of extending that household control globally. If the IoT really does proceed to its logical end-point, every distinct thing you own will be recorded in, and aware of, your personal blockchain. This doesn't preclude much wider-scale blockchains, not least because different types of blockchain may be able to inter-communicate, thereby addressing the current scale limitations of the technology, which in turn reinforces the need for a common grammar. This opens up the prospect of a hierarchy developing within the context of a peer-to-peer network, which would be nothing if not ironic.
The jury is out as to whether blockchains can be made to work successfully in this way. Ethereum remains largely proof-of-concept while Bitcoin is already straining against its inherent limits. What is clear is that there is no diminishing of the desire in the technical community to push this concept as far as it will go. What is also clear is the attraction of the distributed ledger for a variety of other financial purposes, from managing share certificates and dividends to clearing. Given the banking sector's exposure in 2008 to the sheer uncertainty of derivatives and liabilities, it should not come as a surprise that the Bank of England, which has a responsibility for financial stability, has taken a keen interest. The final irony of Bitcoin may be that it provides the sovereign with enhanced control not only over the currency but over property more widely.