Blockchain, Cryptocurrency, and Money
I have recently viewed “Magic Money: The Bitcoin Revolution” on Amazon Prime and it was enlightening. The subject of this film is not how Bitcoin works technically, but rather how it works socially. Basically, it uses the interwebs to decentralize the money system and put the control/responsibility back into the individual. Once I heard this, I knew immediately it would be a perfect fit for Book of I. The wonder of automation and artificial intelligence also fit. Building a society of individuals working as a synergistic team.
So, securing a personal wallet is a concern. (I think I need to get the white paper and understand the basic blockchain system.) For the system to work, the blockchain must be networked and available for all. When a transaction is performed offline, it is not verified until it can be connected to the current blockchain. I think I need to understand the blockchain basics completely before I can insert this into Book of I. Public Key combined with Private Key is a concept I could explain in Book of WU. It is the interaction between individuals.
Stored wealth is unused wealth and thus useless. As an analogy, it is like a battery, yes… but a battery is only useful when connected and expending. A good solar cell array produces electricity while the sun is shining. Excess power may be diverted to a storage battery to be utilized when the sun is not shining. A good system will store enough power to use during peak demand, but no more. Any more excess power may be sold to the electric company to help supply others. This is what investment is. There is a saturation point when more power is stored than is needed. At this point, excess power becomes useless. (The world has a long way to go before reaching this point.) An equilibrium should be the goal.
The Babylon Money System puts control of everything in the hands of a few. Centralized Banking is the control system. Cryptocurrency puts control of everything in the hands of the blockchain. No one person is in control of it. It is decentralized and controlled by automation.
In the film I noticed there are companies which print the private key on physical coins. These are single use though. It seems simply an attempt at pacifying those who want to hold a physical something. It is the reason for coins and paper dollars. (I think it took a while for paper money to catch on… and it is the short life of paper which requires a centralized system to keep it CURRENT.) Gold is a store of money because it is long lasting. It really has no value other than the agreed value we give it. It is the same with Cryptocurrency. Bitcoin value is based on belief the same way gold value is.
Finding more about Ubuntu and Timebanking might also be a good focus for Book of WU. The current system of hourly wage and/or salary is a way to track effort expended on behalf of a company. Recompense. The interwebs connect everyone in a decentralized way. The biggest fear is a crash of the network.
Lost bitcoins exist. Once a private key is lost or destroyed, that value is lost. There is no way of knowing how much is lost unless the entire blockchain is cashed out. People can hold on to bitcoin anonymously, so it is unknown how much of the value is simply hidden from view rather than lost.
There is no way to know how much value is hidden and lost. This seems a bit of a problem. The way I understand it, the blockchain has a finite amount of coins it can produce. Once all the coins are produced, then the coins are limited. This is like tapping out the gold mine. If mining cannot happen, then what happens?
Oh, and another thing. How can the blockchain be everywhere and not be duplicated? How is it decentralized and yet only one officially exist? Everywhere and nowhere. Curious. I guess I really need to get the white paper, read it, and understand it.
Realistically, Money is money. It is worthless if nobody believes in it. I am reminded of Disney Dollars which were produced and could be used as currency in the Magic Kingdom. Of course, this made good sense from a marketing point of view, because it was known that many of the bills would be taken home as collectable items. I notice that they are no longer in circulation, and as such, are no longer usable for exchange, even in the Magic Kingdom. (Perhaps there is still value from a collector point of view.) The question is, is this the destiny of Bitcoin? What if countries make it illegal? Once the public faith is lost, what is the value? Oh, this is a slippery slope.
While we are on the subject, what makes government money any more stable? Again, it is only the trust and belief in the money, the agreement of all, that gives it value. Makes it legal tender. Backed by the faith and trust in the U.S. government. What happens if that trust is broken? Life is agreement. We truly do manifest our lives. If enough people decide to do something else, the system breaks down. Chaos reigns. Freedom is the best defense from Chaos. Decentralized control. Free enterprise which is truly free and available to all.