Evolution of Money
The Players
What if I told you that you couldn't really do what you wanted in life, that you've never really been given much choice in the matter? Would you believe me? Probably not, for the most part, because you tend to make decisions on a day to day basis for your own self, instead of being told what to do. Or at least you think you do.
But the fact of the matter is that the world we live in is littered with powerful entities - people, companies, governments, and more - that directly or indirectly restrict how we live and what we're able to do on a day by day basis. Literally. These entities surround us and they all have some degree of impact on the practical choices we're able to make throughout life. This isn't a result of malicious entities - though they do exist out there for sure. Some of those entities are extremely powerful, like the US government, and some are only slightly powerful, such as your cable company or car insurance company.
Now, before you get the wrong impression, I want to clarify that this isn't an argument that any of those entities are good or bad or anywhere in between. Rather, the goal is to establish the players which have the most to lose during this next phase of human history. And in the process, we'll look at you - the entire rest of the human population - as we begin to understand who has the most to gain during this next phase.
Ok, so at this point we've listed governments and cable companies and insurance companies. But what else? Who else? How about the entertainment industry, the hospitality industry, or the travel industry? And banks? Wooooo... banks are a doozy for this discussion! These are the types of entities that we will be thinking about during this journey. Entire industries that operate across the world. Because, whether we realize it or not, every single one of us is operating in and affected by the massive, global economy that now engulfs Earth.
The Problem
When we think of the above companies and entities, there should be at least a few traits that stick out for every single one of them, regardless of their size or function:
1. These entities all operate on consolidated power
a. What gives any entity its power? Its network, of course. To paraphrase Metcalfe's Law: The power of a network is proportional to the square of the number of connected users of the system
2. These entities all command a transfer of value - some kind of currency - in order for you to participate
b. The foundation of every successful economy is the implementation, and proper management of, a system of currency. A system of currency is how a society keeps track of the value that each
individual or entity has created and contributed to the larger economy. Created by selling their labor or services or goods; contributed by paying taxes and participating in the economy.
What we discover, from a bird's eye view, is that our entire economy, from the smallest level to the largest level, is built around the concept of funneling all of our money, or value, to positions of consolidated power.
This in and of itself is not a terrible thing. Quite the opposite, in fact. At the largest levels, many of the governments and corporations in today's world are directly responsible for the excellent quality of life that so many of us are able to obtain and maintain. In order to be as successful as they are, these entities need to instill massive amounts of trust into any network of people that relies on them. Without that, the system fails. Simply stated, this is how an economy works.
The problem with our current version is that there is no efficiency in it. In fact, quite the opposite. The current system of currency that we operate on is extremely expensive. Every single transaction that is performed at any level of an economy needs to ultimately tie into a single, large, cumbersome, and expensive to audit and maintain currency system. These large and expensive currency systems span the entire globe - the USD, GBP, EUR, JPY, AUD, etc. Once more - this is extremely expensive to operate.
The reason for this expense is the inherent need to prevent fraud in the system. When any single area is not audited properly, the entire system becomes vulnerable. This pertains to any potential exploit, large or small - think counterfeit $20 bills alongside the size and scope in which Enron cooked the books. This is a massive societal effort.
And what this boils down to is trust. Trust is hard to earn. And when you're working with a system of currency in a massive economy, there's nothing that you and everyone else needs more than to be able to trust the people that you're working with. So that's what we do as a society in order for our economy to thrive. We commit an endless amount of time and money into ensuring that we can trust, or safeguard ourselves from, the people working with us in this game of economics. We hire accountants to create spreadsheets and ledgers of data, lawyers to draw up and approve contracts, auditors to double or even triple independently verify the numbers and contracts and overall trust and more - all simply as an expense of playing in this system. All of that information needs to continually be compiled and recorded into huge ledgers and record systems of all kinds. Banks. Creditors. Local government. State government. Federal government. Every single company, every single person. Every one of us, at the individual level and every other level of society, all need to work together in order to build and record that extremely massive ledger of information that flows through our economy every day and every year. Have you ever NOT needed to constantly prove your identity to every single bank, every single level of government interaction that you've ever done - taxes, driver license, social security, etc - and not thought about how much of your TIME it was consuming?
So all of this leads back around to why you can't really do what you want on a daily basis. You think that you can, but in reality you're very strictly confined to playing within the set of rules that powerful entities and, most significantly, our system of currency, has imposed on us.
These companies and governments have been extremely successful in implementing the types of things that people of a free society desire. However, like every entity, they have to pay to play in an extremely expensive economic world. In order to participate, all of these entities need to comply by rules and
regulations that have been implemented by governments and lawyers - again, for the sake of even being able to participate to begin with! This permeates our society and, at its core, it affects each and every one of us.
1. We need to pay the expense of that system. The payment comes from our hard work, our savings, and any other value that we've been able to create or lucky enough to receive in our lives.
2. We need to live by the rules that are collectively imposed on us at any and every level of the system if we want to participate in the ecosystem.
I cannot overstate this so, for good measure, here goes once more: This is an EXTREMELY expensive and inefficient system that we live in.
The Solution
What if I told you that I could stream more movies to you for a fraction of the cost of what Netflix charges? Or that I could give you encrypted cloud storage at a fraction of the cost of an Amazon cloud storage subscription? What if I said that I could automate the creation and audit of otherwise expensive contracts that would require costly lawyers and auditors? Or that you could get a great car insurance policy at a fraction of your current cost? Do any of these sound like good propositions?
These are all things that are literally possible and currently being built!
Anything that you can think of along these lines - ANY and EVERYTHING that you can think of that is in any way related to the economy and how money flows through it and contracts are enforced and trust is verified - all of these problems are resolved with technology that already exists.
No joke. And the way that they all work is through a new system of currency and value and trust that is possible on top of a technology called blockchain.
If blockchain sounds familiar, that's probably because it's what the Bitcoin protocol operates on. Yes, that Bitcoin. The one that was created by an unknown person or persons in 2008 and has been on a fairly wild up and down ride ever since then.
But if there's one thing that Bitcoin has proven over the last 8+ years, it's that it works. Bitcoin has had its stress tests, for sure. From the failed Mt. Gox to the current scaling issues that are being addressed, a lot of pressure has been put on it. But it has still held up to the pressure. With a market cap of over $40B USD, it has held up to all contenders that have tried and failed at breaking it. This has resulted in increased trust in the system which has resulted in increased currency being put into the system which has resulted in increased value of the overall system. It is growing organically - a product of the community that sees its potential and wants to use it to change the world. Again - literally!
As a result of Bitcoin's tremendously successful run, all kinds of new alternatives to Bitcoin have been and are being built on top of the blockchain concept. A lot of these alternatives, which are referred to as altcoins or, more properly, cryptocurrencies, haven't really taken off in popularity and market cap like Bitcoin has. But there have been some serious contenders, such as Ethereum.
Ethereum is another blockchain-based system of currency and value and trust, but its practical purpose of operation isn't really as a contender to the economic purpose of Bitcoin; instead, it's complementary as it is a platform that is built for creating and executing smart contracts.
Remember those lawyers and the banks and paperwork that are so expensive in Currency v1.0? By building smart contracts on top of the Ethereum blockchain, one can have an ultimately less costly experience than trying to operate in the traditional financial world.
These concepts, whether they're built on the Bitcoin blockchain, Etheruem's blockchain or some other implementation of it, all stand to offer considerably cheaper and more trustworthy implementations of storing and transferring our economic "value" to other entities in the community - whether it's your local community or your global community.
Currency v2.0 has arrived. The trust system, and all the equity and liquidity that go with it, is still building up steam. It's still being tested. But it's quickly taking the world by storm. There will be winners and losers in this new digital economic space. But one thing is certain, people will eventually start to gather around the various currencies that offer the best uses and the most flexibility - just like we currently do. They will likely keep different amounts of money in a variety of different cryptocurrencies, in the same way that we today keep money in savings accounts, checking accounts, cash, stocks, bonds, and other places.
While some will primarily be adopted for use as a savings account for long-term storage (for example, think Bitcoin = savings account), others which are cheaper and more practical for day to day use will begin to develop and will become the new equivalent of carrying cash. Except it will be globally accepted cash instead of USD or GBP or whatever.
All of us will be able to operate in the real world at a fraction of the cost of what it currently costs society - all of us - to participate. With the massive advancements that are occurring in the automation and artificial intelligence spaces, it's very likely that humans will soon no longer need to work in order to participate in the global society. They will be able to if they want to, but they no longer need to be forced to do jobs that they don't enjoy and want to do.
There's another bold statement. But think about it for a second. We already know that the unemployment market is saturated in America. And if blockchain (and other!) technology continues to slowly eat away at those traditional work spaces? The work that's being done here will essentially automate away so much of the effort and expenditures of so many men and women that currently have full time jobs only for the sake of supporting that system, that it will no longer be possible to keep everyone employed as that continues to happen. We're literally automating away the need for it, and blockchain makes it all possible.
2017 has been dubbed the year of the crypto. I think it just might be. This is the year that the concept of crypto-assets are really starting their ascent into the public consciousness. The massively expensive
way in which we've needed to rely on Currency v1.0 is almost over. The entire way that we live our lives will change from this.
And, similar to when mankind first discovered agriculture and writing, this discovery IS spreading its way across the entire human race. This is how our ever-increasing global economy evolves. This is mankind's next massively significant achievement on a long and successful timeline of achievements.
If this sounds like an exciting vision, continue to read about the blockchain technology and community. Do some basic research and an occasional search for any recent news articles that may have come out. Build your familiarity and trust level and decide whether it is a system that you would like to invest in helping to become a reality. Speak with friends and family and get their opinions. After all, this is all about building trust in a system. There’s no better way to go about it than to do it with those that you already know and trust.
BTC Address: 1LXsfSUEbmt92NtZRnf4Xr26aquDvDZKfN