currency

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Currency as language.

On this wonderful journey of cryptocurrencies, I explained why in the next decade there will be a currency for everything (even people).

One of the rising protagonists of the cryptocurrency movement is Andreas Antonopoulos. He shares my vision of a world where there will be thousands of currencies. He has a knack for distilling some of the concepts into succinct terms. During the recent Coinsummit conference, he mentioned this future again and used a term that so aptly describes what is going to happen.

Currency will become a language.

Because (soon) anyone can create a currency that is instantly global and more to secure to counterfeiting than any other form of money we’ve seen. And when this happens, people will have free choice to affiliate their monetary value to any community they wish.

When you are faced with an option to use equally secure forms of money with equal monetary value, you are going to use the one that speaks to you: that represents the ideas you want to affiliate with. For example: let’s say there is a currency for death-metal fans & a currency for jazz fans. If you had the option to (without financial risk*) to use one that speaks to you (jazz), you’ll use that one. It becomes a vote for that community. It is the glue & lifeblood that builds a foundation for those networks of value. I like putting it in terms of this other post I made about music & people’s disdain for when artists go mainstream. The “law of hipster connection” states: 

The more obscure and deeper down the rabbit hole of music you go, the deeper and more intimate connections between individuals become.

Replace “music” with any “meme” (in the Dawkins sense of the word). I use art as an explanation as well.

Understanding others through a cultural meme is sort like a proof-of-work for connection. If I like something, and someone else likes it as well, it speaks to what has happened in our life and the roads we unknowingly shared to be able to come together and appreciate that meme (note. Again, I’m using meme in the correct way here, not referring to funny internet jokes).

This week, through serendipity of the internet, Marc, a musician from Johannesburg called me to explain just how excited he is about “The Cypherfunks" (internet band & cryptocurrency community). It is inevitable then that barriers of trust are completely destroyed, because we both "get" it. It is a wonderful feeling.

And so, currencies will become languages: indirect votes of the community you affiliate with. If I use Dogecoin, it represents the welcome, light-hearted and charitable community we’ve come to know and love. If I use FUNK, it represents the community of musicians coming together to make music with others across the world. The currency becomes loaded with meaning, and that meaning speaks.

And that is so exciting. So incredibly exciting. It speaks to people in terms of agency & in terms of connection. The great inventions of the world bring us closer, because deep down, one of our greatest desires is to rally against this shell that is our body. We touch. We talk. We fall in love so that the barrier between us and others fall down. And that makes these experiments all the more worthwhile.

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*Just a note on financial risk. Of course, if we assume a very liquid world containing various networked currencies, there’s going to be some risk in holding a currency. The natural order of things is for communities to arise and die, but sometimes your propensity of risk is to not necessarily want to be financially involved. There are however ways to mitigate this, and it is already becoming possible. An example is Coinbase’s (apparently) upcoming feature that when people spend their Bitcoin, it immediately transfers your dollars in your Bank account (through ACH) to Bitcoin and pays with that (or replenishes it, straight afterwards). This means. When faced with a situation to pay for something, you can choose a currency, as long as it is immediately exchanged into the other. For those with less propensity of risk , they can keep their currency in a system that is currently more stable, and then when paying, it becomes a vote for a more specific community. Paying with Bitcoin through Coinbase using this method is a vote for Bitcoin: a community that represents this potential. In the future, it could even be from Bitcoin -> other currency networks.

Bitcoin is not just a state-less currency, it’s also a reality-less currency.

One of Bitcoin’s unique features is that value can be moved around in a much more liquid fashion than any previous forms of money. Anything that can be touched digitally can touch upon Bitcoin.

Bitcoin is the first truly decentralized form of money. No one controls it. This possibility is exciting. It’s a state-less currency. We are seeing the ramifications of this already (people being paid with Bitcoin in jobs where what you create is not bound to the idea of a state: such as digital freelance work). The idea of a state-less currency means any nation’s currency will contend with Bitcoin. There will be countless ins and outs into the currency. I’m not sure yet whether it will happen, but it seems possible that Bitcoin will become the reserve currency of the world, rather than another nation’s currency (such is the case now with the USD). The problem with having another nation’s currency as the reserve currency is the political implications (and trust).

An example of this is the BRICS recent decision to increase trade in their own currencies rather than rely on the USD. Even if a country despises the US, the USD is still regarded as the ‘reserve currency’ and other countries reluctantly have to deal with it, because that’s where trust and value lies. But, if there is a neutral currency, then trust will gravitate towards it over time as distrust breaks down relationships between nation-type currencies.

Now, what I actually want to say. If you look at Bitcoin simply as an equivalent to a real world currency, the in and outs into it will be nation’s currencies. However, as I mentioned, Bitcoin is digital. Anything that is digital will and can affect it’s value.

This means Bitcoin is also reality-less (for lack of a better term) currency. And easily so. Virtual economies have always been valuable, but its always been restrictive in terms of money flowing into and out of it. You have your traditional MMOs where ‘black market’ trading of Gold and items exist (such as in WoW), and then you have your more open MMOs like Second Life and Entropia Universe where trading money into the world is accepted. 

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Famously, a $635,000 island was sold in Entropia.

However, as I stated, liquidity is hampered like any current traditional exchange. With Bitcoin, there’s no reason why any virtual items and goods can sold in the game for Bitcoin and use the Bitcoin protocol immediately. So, now you can see that not only will nation-currencies contend with Bitcoin, but virtual currencies as well. And it can more easily exist without having to even need a separate currency (such as is the case with current MMOs).

So, just imagine. You walk into your local pub and pay with Bitcoin. Have a few drinks with your buddies. You get back home and play an MMO and with that same Bitcoin, you buy virtual items. All the transactions go through the Bitcoin protocol (you don’t have to use the protocol. You can keep it off-chain). The items sold in the game are immediately deposited into your wallet. It’s seamless like you’ve never seen it before.

There are examples surfacing of this:

Dragon’s Roulette. MMO casino powered with Bitcoin.

Bitstrat (in early beta). Wager on skill-based games.

(I recall seeing another one where the in world game uses Bitcoin as currency, but can’t find it now. If you know, link it please).

I do want to see a fully fledged game that focuses on Bitcoin as currency and uses it’s strengths in such a game.

So yeah. It’s not farfetched to imagine virtual worlds also contending along with nation-currencies with Bitcoin. It’s exciting!