http://cryptonomics.io/news/the-beautiful-basics-of-bitcoin/It was only in September of 2013 that I was finally introduced to bitcoin. A chance encounter would put me face to face with my now friend Sean – who was a bitcoin fanatic. His excitement failed to rub off on me and I continued my day to day business as usual.
More time passed and more conversations centred on cryptocurrencies flowed. The concept was beginning to grow on me, albeit slowly. Conversations turned into research and knowledge promoted understanding. Bitcoins niche self-regulating accountancy protocol started enticing me – even exciting me.
Money has turned into religion. How this came to be I’m not sure. The comparison is accurate though, as money is powered by faith – blind belief that promotes confidence and suppresses insight. When did we get so blinded?
Fiat is Latin for ‘let it be done’. Effectively any unit of exchange can be classed as fiat. Fiat has been unhooked from its original meaning though. The dictionary defines fiat as: ‘an authoritative decree, sanction, or order: a royal fiat’, with its synonyms being: ‘authorization, directive, ruling, mandate, diktat, ukase’.
It will come as no surprise then that ‘fiat money’ has been defined variously as:
- any money declared by a government to be legal tender
- state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard
- money without intrinsic value
Cryptocurrencies are the people’s fiat. Its value isn’t created intrinsically or governmentally. It’s unintentionally become the peoples decree. Faith once placed in central authorities has been replaced by mathematics. The ugly has been surpassed by the beautiful, the mystical replaced with the tangible and faith has been converted from ‘blind’ to ‘science’.
Sceptics point to flaws inside bitcoins protocol as a reason for a demise. This negativity is short sighted. Would these sceptics have discredited Newton’s theory of gravity because it wrongly predicted Mercury’s orbit, if albeit slightly?
Science is a beautiful application. No longer do we live in a world which promotes beliefs, we demand factual assertion. Science is the evolution of thought. We combine observation with theory. When the two don’t match we promote new theories – the process continues until they align indisputably.
Flaws are an inevitability. How we handle these flaws is not. Bitcoins decentralised system leads to the scientific method, centralised systems usually do not. Evolution is tried and tested. Science is tried and tested. You get the point I am trying to say – evolution and innovation promote the same goal.
The monetary system has not bred innovation. To those who are scared of innovation I suggest a re-reading of your history books. Innovation has created everything around us. Applying the scientific method to monetary systems is the Holy Grail. Finally Sean’s excitement has rubbed off.
