Should you invest in Bitcoin? Maybe not, says Brad Templeton, but that doesn’t mean the digital currency isn’t amazing in and of itself. Templeton explains what Bitcoin achieves and how it’s set to spur further innovation.

Brad Templeton is one of many ahead-of-the-curve speakers at 2015’s Exponential Finance conference, June 2-3 in New York City. Co-produced by Singularity University and CNBC, Exponential Finance provides insight into new technologies that leaders need to understand in order to make the most of the accelerating change happening across business sectors.

Brad Templeton:  So there are a couple of things to tell people about Bitcoins.  I actually try to help them explain how it works because that does actually have value, but we won't do that in this short thing.  But, should you invest in Bitcoins? I tell people no. I tell people that the value that people are applying to Bitcoins today is definitely speculative. And so that doesn't mean you can't make a lot of money, everyone knows what's called the greater fool theory that you make money from greater fools and you hope you're the lesser fool. But obviously there are just as many people who fail on that that is who win on it. So, not necessarily something to invest in today, but the technology, the idea, this is very interesting. This is worth looking at.

So what Bitcoin creates is a ledger that needs no bank. And that's actually pretty important because if you think about what is a bank, at least as far as the money transfer and the checking and savings, not the loan part, but the financial, the moving money part of a bank, it's really — it's a secure ledger. The bank does not just have a little file that says your account has $3,000 in it. They insist that when you write something, they make a note in their ledger that $1,000 is transferred from your account into someone else's account and so on and that's important to make it secure. Well, what the designers of Bitcoin created was a way to make a ledger that's secure and that everyone can trust, but that no one owns or controls. And this allows people to have money that can be free of the influence of governments, which is both bad if you're a government and great if you don't like what governments do with their monetary policies. It lets the policy be set by consensus and software. So Bitcoin basically has found a way to always know what the majority thinks, and by always knowing what the majority thinks, you get something you hope you can trust. In theory if someone controlled more than half of the computers in the world they could take over Bitcoin, but that's pretty unlikely.

So, why is that exciting? Well, I grew up with the internet and I'm old because the internet has actually been around for a while. And the things that I think gave us the revolution of the internet, that made it change the world so much are things like the fact that it's open and anyone can innovate on it. And things like the fact that the smarts in the internet are not in the network; they're in your phone; they're in the Web server you're talking to; they're in your desktop computers. They're not in the networking equipment. And that means you can innovate on the internet without asking anyone's permission. You don't have to call the phone company and say, "Hey, I want to put up a cool website." I'm just going to do it. And that gave us all of these wonderful things like Google and YouTube and Facebook, and all these other websites because people sitting in their father's basements could create new products and send them out to the world and try them without having to ask anyone's permission and without having to spend a lot of money. Now Bitcoin is also efficient. It's designed to allow financial transactions to take place at a very low cost. But, this system that doesn't have anyone controlling it and thus has no one to ask permission of is a system that will allow that type of innovation to take place in the world of finance and in the world of contracts. The same kind of innovation that happened in the world of communications and interacting with other people that the internet gave us.

So the hope for Bitcoin is this is a platform where lots of innovators, all sorts of innovators, people like people in dorm rooms who gave us all those big internet companies can do the same thing in finance and in contracts. And I say in contracts because while the only thing people use Bitcoin for today is effectively to write checks that transfer title in some Bitcoins to another person or another secret numbered account because it's designed to be public in what you do, but private in terms of who's doing it. It actually becomes possible to do things like write a contract and say I transfer one Bitcoin to you if the following is true, like if you've delivered the thing you're supposed to deliver to me or something like that. And so now the contracts are enforced without courts, without any other third party. So the ability for people to just play with that and innovate with that that's really exciting and that's why you want to pay attention to Bitcoin.