Bitcoin, Cryptocurrencies & The Future of Money

The future of money is within cryptocurrencies, such as Bitcoin. In a TED talk summarised within this article, Neha Narula explains why digital cryptography based currencies are becoming so popular.

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Neha Narula talks about the future of money in this TED talk. Cryptocurrencies, like Bitcoin and Ethereum, are becoming the future of money.

In such a world where digital currency is becoming the norm, humans and institutions are removed from the loop along with any former friction that was caused because of them.

The webbot, with Clif High interpreting the data over at Half Past Human, has been forecasting for years the fact that Bitcoin was going to get very popular and that it would be a good option for people to invest in. This sixteen minute talk is useful for understanding why this is the case and why it has already become as popular as it has.

Cryptocurrneices are based on an area of mathematics called cryptography. Cryptography is about secure information. Masking information so that it can be hidden in plain sight is why this is so successful. Because of how this works, the U.S. Government has actually classified cryptography as a weapon.

During WWII, breaking systems like Enigma, an encryption based machine, was critical to learn about enemy communications. Today internet browsers are secured in a similar way and this helps protect our financial transactions.

What this translates to is that we can actually do our own transactions ourselves, because of the secure technology that protects us, to a degree of course.

Back in the early 1900’s, a culture called The Yap existed in Micronesia.

The Future of Money – Bitcoin – The YapThese people used limestone discs for currency — they were very big. The largest is known to be four tonnes and about four feet across. So as a community The Yap just kept a note of who owned what stones, as they couldn’t be moved around very often.

Narula talks about a story, to prove a point she is making, where some sailors were transporting one of these stones across the ocean and some trouble came up causing the limestone disk to fall into the ocean. The sailors returned home and told everyone there what occurred, but after a discussion it was decided that the sailors still owned that stone, even though it was at the bottom of the ocean, it was still part of their finances.

The Future of Money – Bitcoin – Rai Stone
Rai stone on display at the Bank of Canada Currency Museum in Ottawa, Canada. (Wikipedia)

This is still happening right now in our day and age. Back in 1932 the bank of France asked the United States to convert their holdings from dollars into gold.

It was too inconvenient to actually ship all that gold over to Europe, so instead someone went to the location the gold was stored and labelled it as belonging to France.

Everyone agreed that France owned the gold. It’s just like the Rai stones that are made out of limestone which The Yap used.

Narula says in this video, “there’s nothing inherently valuable about the dollar, or a stone, or a coin; the only reason that these things have any value is because we have all decided that they should, and because we have decided that they do. Money is about the exchanges and transactions that we have with each other. Money isn’t anything objective, it’s about a collective story that we tell each other about value — a collective fiction — and that’s a real powerful concept.

Bitcoin is based on the same concept that The Yap’s currency system used.

Through thousands of networked computers around the world, all the transactions occurring over Bitcoin is recorded. Collectively they confirm who owns what.

You can learn more about how bitcoin works and hear the full sixteen minute talk below.

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6 Comments on "Bitcoin, Cryptocurrencies & The Future of Money"

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Stargazer
In such a world where digital currency is becoming the norm, humans and institutions are removed from the loop along with any former friction that was caused because of them. One of the concerns I have with any form of "digital" money is that it is dependent upon technology.  A pocket full of cash spends a lot better in a power outage than an IOU or a check.  🙂 The other thing is that any kind of digital funds (while certainly convenient–and wholly appropriate for routine bill-paying, etc.) can be controlled, confiscated, tracked, or disallowed at the push of a… Read more »
Kristiina
That's a common misconception about these new cryptocurrencies as they can't be controlled like that. With bitcoin, because transactions are shared globally it's pretty much impossible to manipulate or shut down the system. You don't need the internet working 100% for Bitcoin to still be an option because of this reason. You could just have a local network and it would still function for example. It's usefulness therefore depends on how many people decide to use it. I think that a good backup to using a system like bitcoin is to invest in precious metals. Yes, agree. I also like… Read more »
Jenny

Perhaps the best form of exchange to get the things you need or can't create yourself, is bartering? 

No reliance on elec-trickery, and pretty much most people have something – knowledge, practical skills, healing, love being just a few – they can contribute.  It seems to me that cryptocurrencies are just another form of money, or even precious metals for that matter.  Better for everyone if we had a number of things that can be traded with rather than just one thing that is marked as 'currency'.

Marilyn

We are already dependent on technology and we already have a digital financial system, but right now it's a centralized one, which is what makes it corrupt and doomed.  Andreas Antonopolous (see him on youtube) is great at explaining.  In order to decrease their control over our productivity we need to remove our consent by using decentralized, peer to peer systems, like Bitcoin.

Hailstones Melt
I find it interesting that the stone currency format the YAP are using (intriguing) has the concept of the void or place of potential in the centre, surrounded by the substance. This symbology of a circle with an empty centre is found in many ancient cultures, notably Chinese. The coins of ancient China (Song through Qing dynasties) were made of copper and had square cut holes in a round coin format. This was only changed at the appearance of the Yuan. Original British settlements in parts of Canada (Prince Edward Island) and Australia (New South Wales) had a "Holey Dollar".… Read more »
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