I know jack about crypto. But what I do know, I learned from this Bloomberg Businessweek issue: https://www.bloomberg.com/features/2022-the-crypto-story/
Billed as the only article you’ll need to read about crypto, I can’t comment one way or another about the veracity of that statement. But it is thorough, I will give it that, coming in at 40,000+ words on the topic. That’s an entire magazine issue, written by Matt Levine. I am willing to go on record to say that it cleared some things up for me. What things, you ask? The following:
- Much of modern life exists as entries in a database. The money in my bank account isn’t really money in my bank account. Instead, it’s an entry in a ledger saying I have a certain amount of money that my bank owes me. The title of my house and my car are, at their essence, lines in separate, but similar, databases.
- There is a good amount of public trust in those entities charged with keeping tabs on those databases to not cheat, take my money or give away my house and my car.
- Cyrpto came along and said, in Levine’s words, “No, no, no. Trust is bad. Don’t trust your bank. Use immutable code. Verify every transaction for yourself, or download open-source code and verify that it works correctly, and then use it to verify every transaction for yourself, or at least use a network in which that’s possible and in which economic incentives demonstrably make it likely that it will happen. And do all of this in a system that’s resistant to changes, that can’t be controlled by governments or banks, that’s immune to the rules of wider society.”
- So… what if there were one database, and everyone ran it?
- And there you have the basis of blockchain, and the basis of crypto.
- From there… it gets weird. Really weird. But there’s one takeaway: Money, all money, is a social construct. “If you do good stuff for other people, they give you money, which you can use to buy good stuff for yourself.” And crypto, just like “fiat” currency, is money that is controlled by consensus. And the database entries in the blockchain of who owns your house or your car or the number of pennies in your bank account are also controlled by consensus.
- For the time being, I’d prefer some consensus rule that also includes a healthy dose of regulation and oversight.
- Consensus says it’s my bedtime.
ReMarkable 