There is no Federal Reserve, or the equivalent of a Bank Indonesia, that controls or regulates Bitcoin. There is no central payment company like PayPal or GoPay that owns, promotes, or operates Bitcoin.

Instead, Bitcoin is like digital gold. It can be “mined” just like gold. Once you have Bitcoin you can hoard it away and nobody can take it from you as long as you keep your digital wallet secure.

The idea for Bitcoin was released to the world through a now famous white paper reputedly authored by Satoshi Nakamoto in October 2008. In this paper, Nakamoto defined an electronic currency system that allowed instant payments between two or more parties connected through the internet without the need to trust any third-party intermediary, or indeed, without the need for the transacting parties to know or trust each other. What was trusted was the underlying technology – and that technology was blockchain.

It is worth noting that Bitcoin has never been hacked or compromised. Nobody has ever been able to create Bitcoin out of nothing, nor to alter or reverse Bitcoin transactions. Nobody has ever been able to break the blockchain security that underpins the trust in Bitcoin.

Nakamoto was able to describe a new and clever way to employ cryptography to enable the use of electronic money between peers on the internet.

In essence what Nakamoto described is a transaction ledger that records transactions involving the creation of Bitcoin, and the movement of Bitcoin from one party to another. The innovation is that this ledger is not owned by any one party but exists as a decentralized database distributed amongst all the participants in the Bitcoin network.

Cryptography is employed to ensure that the distributed ledger can never be altered or deleted, only authorized entities can send and receive Bitcoin, and a consensus algorithm ensures that all parties who have a copy of the ledger can agree that the ledger is true and correct.

Underlying the consensus algorithm is another feature of blockchain which is transparency – all participants can view the blockchain. While the identities of Bitcoin owners may stay secret, the transactions they execute are there for everyone to see. It is often said that blockchain allows peers to transact with confidence, in a trustless environment.

So, when we are looking to take advantage of this innovative new technology that is blockchain, what is it that we are looking for to realize the promised benefits? The answer lies in trust and lowering the cost of participation.

When we examine almost any ecosystem where multiple parties participate and transact, we find that for that ecosystem to work and provide benefit to all participants, they all need to have a degree of trust in each other. In most traditional ecosystems that exist today, parties operate in silos, with their own databases, and systems.

In such an environment trust is typically established through some sort of central authority or intermediary – let us call them central trusted parties. However, there is a cost to establishing this trust. The central trusted parties require payment to perform the checks and balances on behalf of all the ecosystem participants which adds a layer of cost to the ecosystem. In addition to this cost, the processes associated with ensuring the checks and balances can result in delays and increasing transaction times.

Which leads us to the second question of cost of participation in an ecosystem. The need to pay for central trusted parties raises the barrier to entry, blocking those who cannot afford the fees from participating to achieve benefit.

In Indonesia this is certainly the case. A large sector of the population is blocked from participating in financial systems because the barrier to entry is too high. Either they cannot afford the fees to participate, or the provision of financial products and services to these sectors of the population is unprofitable for the providers of such products and services.

The application of blockchain can address both questions. First, as we have seen, blockchain can allow parties to participate and transact in a trustless environment. The distributed ledger – the blockchain, is what establishes the trust, and therefore can be used to replace the central trusted parties. This does two things – it removes the layer of cost due to the central trusted parties, and additionally can remove some of the delays attributed to the processing of the central trusted parties. In fact, blockchain and smart contracts can be used to automate many of the transactions that take place in an ecosystem.

With a layer of cost removed, this potentially lowers the barrier to providing financial services to those who previously were excluded from accessing products such as loans, credit, insurance, and saving and investment.

As an example, we see many essential supply chains in Indonesia involving micro merchants, farmers, fishers, family-based businesses, who do not have access to supply chain finance or business loans. Traditional banking, insurance and supply chain agent business models are too expensive. The merest setback can put these traders out of business for good.

The opportunity exists to establish a blockchain network as the distributed ledger for the supply chain, provide benefits such as transparency, automation, and traceability, and allow banks and insurance companies to join those same blockchain networks for the provision of supply chain finance and business loans.

The game changing advantage that blockchain provides is real-time visibility of the supply chain transactions for a bank to justify the supply of credit and loans, and an insurance company to provide protection at a micro level.

We can look more broadly at how blockchain might assist in releasing value that is currently locked up in assets connecting these assets to a distributed network. There are many assets in Indonesia where the value is locked up and inaccessible to all but the wealthiest.

Investing in buildings, private companies, public infrastructure, and even exotic assets such as art, requires significant amounts of capital. This is because today these assets are traded as a whole, and we don’t have the systems and networks to break these assets down into small enough parts and allow the trading of these parts.

With blockchain, a building could be divided into micro-components with each component represented as a non-fungible token on the blockchain, available to be owned, bought, and sold in a peer-to-peer marketplace. This would greatly increase the number of Indonesians who could participate in the property investment, enabling them to grow wealth.

By connecting assets that today are owned by a few to blockchain networks that allow these assets to be tokenized and traded, we are freeing up value and putting it to work for a much bigger audience. This is the future that blockchain could enable in Indonesia.

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The writer is cofounder and director of SmartData.