Most discussion of Bitcoin has surrounded its use as an alternative money. That’s great, and there’s a desperate need for an alternative to national currencies.

But what the public discussion has mostly overlooked is the most marvelous feature of Bitcoin, the real source of its value proposition: its underlying information architecture.

Some players in the financial world are beginning to get it. The NASDAQ Private Market will begin to experiment with using the Bitcoin infrastructure to conduct trading, rather than relying on hand exchanges or third-party contracts that require trust.

Let’s parse this a bit. And consider the implications.

Bitcoin lives on a ledger called the Blockchain. This ledger exists on the Internet on a network that is distributed to the whole planet. It syncs up in real time for anyone to see — the ultimate transparency.

Anyone can see the Blockchain in operation by going to Blockchain.info, for example. Here you see the trades along with the public addresses of the sender and receiver. The records are verified multiple times, non-forgeable, non-reproducible, immutable, and even immortal.

What happens on the Blockchain is forever recorded on the Blockchain. Even now, you can observe every trade since its inception in January 2009.

What is this technology good for? It’s not just about money. It permits the packaging, titling, and commodification of any bundle of information data. This bundle can be ported from place to place and virtually zero cost. This happens without using a third party. Transactions take place person to person, exchanged just like goods and services.

In other words, the Blockchain allows information to behave exactly like physical property, but with one difference: you don’t have to be physically present to exchange it.

The Fox reporter who interviewed me on the topic asked why this isn’t possible on the Internet without the Blockchain. But think about it. If you send me a file, what you are really doing is creating a copy of the file, not actually sending your own file. I can take that file and change it, or copy it, and move it onward. This can occur an infinite number of times.

This is not how property in the physical world works.

The Blockchain, then, causes the digital world to behave like the physical world, without the limitations of weight, space, and, increasingly, time. Simply put, this is awesome.

This is why financial markets are starting to dig it. And this is only the beginning. Anything that can be rendered as an information bundle — titles, contracts, laws, deeds, wills, stocks, bonds — can be ported around the globe as real property. And this can be done without the risk and cost of using third-party agencies that rely on trust.

This has never been possible before. This is what the Blockchain makes possible.

Keep in mind that this service would be dearly useful to the world whether the Bitcoin exchange rate to the dollar is one million or one penny. It really doesn’t matter. Not even the price volatility matters since these Blockchain trades can take place with just infinitesimal fractions of currency units.

It’s been six years since Bitcoin was released. But only now are institutions starting to realize the implications of what Satoshi wrote in his original white paper:

What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions.

Above is my appearance on Fox Business in which I discuss some of the wonderful implications of NASDAQ's move.