Physical coins will soon resemble antiquities from another era and are exclusively found in locations like galleries. This means that actual money will vanish. Technology will be used for transactions.

Let’s begin with a tale about the Yap civilization, which existed in Micronesia in the early 1900s.

Yap

They made use of these Rai stones, which are limestone discs. Because Rai stones can be so large, the natives don’t actually trade or exchange them as we do with our coins. The yap only kept note of who owned what stone’s portion.

A stone was being transported by some sailors across the sea, but when they encountered difficulties, the stone actually went overboard. After returning to the main island, the sailors told everyone what had transpired. Everyone came to the consensus that it did matter that the sailors had the stone. Despite being below the ocean’s bottom, it was a part of the Yap economy.

You may imagine that this society was quite modest 100 years ago. The Yap still utilizes a variant of these stones, however, similar events also occurred in the western world. The Bank of France requested that the US exchange its dollar reserves into gold in 1932. To actually ship all of that gold to Europe, however, was too inconvenient. Instead, someone went to the location of the gold’s storage and simply marked it as France’s property at the time. Everyone concurred that France was the rightful owner of the gold. It is identical to those Rai stones.

I want to illustrate with these two examples that money, stones, and coins are not inherently valued. These things only have any worth because we have all chosen that they should.

Digital money

Digital money allows you to pay someone anywhere on the globe in seconds. When this works, it is because there are sizable institutions behind each one or zero that is entered into a computer. These significant institutions are frequently at fault when it doesn’t. The system has a lot of friction. In India, starting a business online takes only a few minutes, but getting loans and being paid is difficult for her due to conflict. These gatekeepers are controlling both access to digital currency and her freedom of movement.

Institutions

The mechanism is slowed down by many obstacles. Due to records in databases that belong to your bank, or investment firm, digital money isn’t actually yours. Many of these services don’t work together when institutions control the money supply, which limits our options for making payments. Furthermore, it raises transaction costs.

Cryptocurrencies

Digital money known as “cryptocurrencies” is not controlled by any bank or government. It is a currency created for an environment devoid of middlemen. The most popular cryptocurrency is bitcoin.

Cryptography is a specialized area of mathematics on which cryptos are based. To secure communication, cryptography studies two fundamental concepts: masking information so that it can be hidden from view and confirming an information source.

In a society where money is programmable, everyone can be securely paid without having to register, receive permission, convert money, or worry about their funds becoming trapped. Programmable money will alter how we pay, distribute, and determine value, just as the Internet altered how we communicate.

World of programmable currency

Think about a scenario in which a pharmaceutical company could rent out your medical data. They can perform extensive data analysis and give you the cryptographic proof you need to demonstrate that they are only using your data in the ways you have authorized. And they can pay you for the information they learn.

A new journey begins. Cryptos are usable in nefarious trades. Every new technology has trade-offs. Although it gave us many ways to spend time, the Internet also significantly enhanced productivity. By using programmable currency, we can separate the network’s architecture from the requirement for big, reliable institutions. And this forces financial innovation outside, where it belongs. We cannot even forecast how things will evolve and develop as a result of this.

Money transfers are undergoing a technological revolution. However, unless we approach its design in such a way, we won't create a system that is more equitable, progressive, and long-lasting.

You never know what new might emerge with the introduction of these technological breakthroughs! However, being a part of such breakthroughs is exhilarating. Isn't it?

I hope you found this post to be worthwhile to read.