Thursday, September 30, 2021
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How did Currency get this Cryptic? Welcome Bitcoin & Friends

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An avid creative whose word plays so much that words say I play too much; a Ki'shon flow. Life is a journey and we're all full of stories.

‘Too many people spend money they earned

To buy things they don’t want

To impress people that they don’t like’

‘Greatness is an attainment that is bought with the currency of time’

― Sunday Adelaja, the Mountain of Ignorance Money.

Money right? Who doesn’t want it? Who in our generation isn’t struggling, hustling and grinding hard to get it? There’s a lot of drive and motivation behind people trying to make the green paper. If you spend your day walking around and meeting random strangers asking them their opinions about money, you’d hear the most interesting and probably laughable things.

A friend of mine once asked, now that everyone is trying to get money and make ‘it’ apparently, who should sit where and be poor? It sounds funny at first glance but it got me thinking; why is everyone specifically our generation so hell-bent on making money and not just that, the whole idea of spending it in the manner which we see our stars and celebrities spend on our screens?

It reminded me of a quote I saw one time that says and I paraphrase; ‘the thing about money is that those who have it think they are unshakeable and intelligent, unfortunately via this same lack of money, those who don’t have it are delivered the same power.’

This isn’t a write up to suggest that staying poor is the next best thing, just a genuine concern of the lengths we will go and the things we will do just to get to that point of achievement.

But I’ll dwell more on that and how much it has hurt us as a generation in my article Colour Blind, Chasing Green Paper. In this write-up, we want to carefully understand the journey money has made in this world and what form it seems to be taking in our day and age.

Money has been in existence since we could remember. Due to the complexities of ancient history, the fact that a lot of things happened at different places and so keeping record wasn’t as easy, as organized as it seems today, and because the ancient origins of economic systems precede written history, it is impossible to trace the true origin of the invention of money and the transition from ‘barter systems’ to the ‘monetary systems’.

There are at least two theories of what money is and these can influence the interpretation of historical and archaeological evidence of early monetary systems.

The commodity theory of money (money of exchange) is preferred by those who wish to view money as a natural outgrowth of market activity. Others view the credit theory of money (money of account) as more plausible and may posit a key role for the state in establishing mon Regarding money of account, the tally stick can reasonably be described as a very primitive ledger – the oldest of which dates to about 30,000 years ago.

While it may not be reasonable to conclude the most ancient tally sticks were used to keep accounting records in the monetary system sense of the term, their existence does show that ‘accounting’ – keeping a written record of things counted – is far more ancient than many people assume.

Regarding money of exchange, the use of representative money historically pre-dates the invention of coinage. In the ancient empires of Egypt, Babylon, India, and China, the temples and palaces often had commodity warehouses that issued certificates of deposit as evidence of a claim upon a portion of the goods stored in the warehouses.

Money may take a physical form as in coins and notes or may exist as a written or electronic account. It may have intrinsic value, be legally exchangeable for something with intrinsic value (representative money), or only have nominal value.

Of course, the sketchy past of money hasn’t stopped it from taking over the world throughout the ages and has unfortunately been the motivation for both good and evil causes. Now as technology is venturing into uncharted territory, it is as though money was in a way waiting for this moment and is beginning to take on a new form; cryptocurrency.

Another fancy term being thrown around in our current timeline, the unfortunate thing about it is that people have heard about it and even encountered first-hand the way it works, some could care less honestly what it is because for them if you can’t see the money then it isn’t money at all.

Yes, we still have believers in the cold hard cash as evidence enough. Although it’s seemingly thought to be new, Bitcoin which is the first of the cryptocurrency fraternity has existed since 2009 and the technology it is built on has roots going back even further.

Let this settle, if you had invested just $1,000 in Bitcoin the year it was first publicly available, you would now be richer to the tune of £36.7 million. Today cryptocurrencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks, governments and many companies are aware of its importance.

Few people know, but cryptocurrencies emerged as a side product of another invention (interestingly, the story of history, a breakthrough usually manifesting when it wasn’t the prime focus at the time, check out Social Media; History’s Instant Replay).

Satoshi Nakamoto, the unknown inventor of Bitcoin, the first and still most important cryptocurrency, never intended to invent a currency. In his announcement of Bitcoin in late 2008, Satoshi said he developed ‘A Peer-to-Peer Electronic Cash System.’

His goal was to invent something; many people failed to create before digital cash. The single most important part of Satoshi‘s invention was that he found a way to build a decentralized digital cash system. In the nineties, there were many attempts to create digital money, but they all failed.

This decision became the birth of cryptocurrency. They are the missing piece Satoshi found to realize digital cash. It is a bit technical and complex, but if you get it, you‘ll know more about cryptocurrencies than most people do.

So, let‘s try to make it as easy as possible: To realize digital cash you need a payment network with accounts, balances, and transactions. That‘s easy to understand. One major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server that keeps a record of the balances.

In a decentralized network, you don‘t have this server. So you need every single entity of the network to do this job. Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend.

But how can these entities keep a consensus about these records? If the peers of the network disagree about only one  single, minor balance, everything is broken. They need an absolute consensus. Usually, you take, again, a central authority to declare the correct state of balances. But how can you achieve consensus without a central authority? Nobody did know until Satoshi emerged out of nowhere.

Nobody believed it was even possible. Satoshi proved it was. His major innovation was to achieve consensus without a central authority. Cryptocurrencies are a part of this solution – the part that made the solution thrilling, fascinating and helped it to roll over the world.

A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.

Cryptocurrencies are proving to be a kind of alternative currency and digital currency. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.

The most notable, leading line of this currency is Bitcoin which was birthed in 2009, followed a little while after Namecoin and then Litecoin and then Peercoin. The validity of each cryptocurrency’s coins is provided by a blockchain. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.

There’s so much that has got the world talking about cryptocurrency, especially seeing its endorsements by big named organizations and people who hold influence as an asset in their life and space. This just goes ahead to affirm the fact that cryptocurrencies are here to stay – and here to change the world. This is already happening.

People all over the world buy Bitcoin to protect themselves against the devaluation of their national currency. We, in our geographical setting surely cannot overlook the direction of all this and we surely cannot overlook the looming fact that cryptocurrency could be money’s new form.

But just like Spider-man’s Venom costume, though it is coming in an upgrade sort of way, there’s still much to be concerned about what we would look at in the next installment of this series. Cheers. 


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