What an Important Function of Cryptocurrency We Lost


Daniel Jeffreys, one of the authors of the site Hacker Noon, a futurist and thinker, in his article ''Why Everyone Missed the Most Mind-Blowing Feature of Cryptocurrency'' talks about the important function of cryptocurrency that we are accustomed to ignore and what will happen if we activate correctly it.

There is one incredible cryptocurrency function that seems to have been overlooked by almost everyone, including Satoshi Nakamoto. Although, this function actually exists, and it is gaining strength, like a distant hurricane in the ocean, which is gradually being selected to shore.

This invisible function is not yet active. However, when this function is activated, it will shake the whole world and rebuild all aspects of human society. To understand what it's about, you need to remember the history of money.

Ascent of money

Money is a great power. And no one understood this better than the rulers of the ancient world. That's why they gave themselves an absolute monopoly on coining money. They turned shiny metal into coins, paid for the service to their soldiers, and soldiers bought things at local stores. Then the governor passed through the soldiers to the traders a message that read: "Pay taxes in this coin, otherwise we will kill you."

In this paragraph - almost the entire history of money. Coercion and control of business through violence is what can be called a violent intrusion in order to control everything that is possible.

With the transfer of power from monarchs to national states, in fact, there was a transfer of power from one strong person to a small group of strong people, and the right to print money was transferred to the state. Anyone who tried to create their own money was destroyed.

The reason is simple: "decapitation of a snake" is a sure way to destroy centralized enemies. This was done with those who dared to challenge the power of the state and almost the divine right to create coins.

This is what happened in 2008 with e-gold - one of the first attempts to create an alternative currency. The system, launched in 1996, had more than one million accounts by 2004 and, at its peak in 2008, processed transactions for more than $ 2 billion.

The US government attacked four e-gold leaders, charging them with money laundering and doing business with "unlicensed money transfers." The case received a big name "The United States against e-gold, etc." The company was destroyed, bankrupt its founders. The verdict to the leaders of e-gold was not severe, but it was enough to finish the game. Although the government did not technically close e-gold, it was almost the end. "Unlicensed" is the key word in this attack. The power to issue licenses is a monopoly power.

E-gold could apply for a license for cross-border money transfers. Only it would not be able to get it. Of course, the company was kicked out of business. Such a layout works every time the rulers like this. Kings and national states know the true golden rule: Control the money, and you will control the world.

This history has many thousands of years old. The very first emperor of China, Qin Shi Huangdi (260-210 BC) abolished all existing forms of local currency and introduced a single copper coin. Since then, it has become a recipe: exterminate alternative coins; create one to rule by all. Use cruelty and blood to keep your power at all costs.

In the end, almost any system is vulnerable to violence.


The decentralized system does not have a head that can be chopped off. A decentralized system is not a snake, but a hydra. Cutting one head, you will see that several others will be ready to occupy this place.

In 2008, an anonymous programmer, working in secret, figured out how to solve the problem of violent intrusion once and for all, and wrote:

Governments are good at cutting heads off from centrally controlled networks like Napster.

However, p2p networks, such as Gnutella and Tor, seem to hold out for now.

This was the birth of the first decentralized monetary system - bitcoin. Obviously, it was designed to withstand coercion and control by centralized authorities. Satoshi Nakamoto, apparently, for this very reason, decided to remain anonymous and acted wisely. He knew that his head would come out because he was the symbolic "head" of bitcoin.

This happened every time when someone declared that he was Satoshi Nakamoto, or when the media "found" the mysterious creator of bitcoin. When the "fake Satoshi" named Craig Wright appeared, the Australian authorities immediately raided his house. The official reason for the raid was far-fetched, and the true intention was to "decapitate the snake".

As the course of bitcoin increases, the hunting for Satoshi will only increase. He controls at least a million coins that never left his wallets. If venture capitalist Chris Dixon is right and the bitcoin rate reaches $ 100,000 for a coin, then these millions of coins will cost $ 100 billion. And if bitcoin reaches $ 1 million, then Satoshi will be the world's first trillionaire. And this will lead to the fact that the mechanism of suppression will begin to work even harder and faster. You can be 100% sure that against it at any time will be ready to deploy this special operation.

Wherever he was, my advice for Satoshi is: Stay anonymous until death!

However, the ability to resist censorship and violence is just one of the many functions of bitcoin. Many of these key components already work in other crypto-currencies and decentralized applications, primarily in block systems.

Blocks are distributed registries and a third factor in the world's first triple-entry accounting system. And breakthroughs in accounting have always caused a surge in economic growth.

Triple entry, decentralization, and resistance to violent intrusion are also far from everything that crypto-currencies are capable of, and this is not their true strength. These are just the mechanisms of the system - that, by virtue of which the crypto-currencies survive and thrive, giving humanity new opportunities.

The key function of bitcoin and other cryptocurrency is still hidden from the public, despite some hints.

The true power of cryptocurrency is the ability to print and distribute money without the involvement of centralized government.

Maybe this function seems obvious and even realized, but I assure you, it is not. Especially in the sense of distribution. Power always belonged to rulers and nation states that were "God's anointed" and enjoyed the corresponding rights. Until now.

Now, this right returns to the rightful owners: ordinary people. And this will open the doors of world trade for them, sowing seeds for the economy of abundance in the spirit of the "Star Trek" and sending the old world order with its economy of scarcity of resources to pages of history textbooks.

Only there is one problem. No one has created a cryptocurrency, which we really need. Satoshi understood the first part of the statement - about the power to print money. What he did not consider is the ability to distribute this money.

The second part is the most important in the puzzle. Problems with it gave rise to a critical shortage in the bitcoin ecosystem. Instead of distributing the money as widely as possible, bitcoin simply replaced the central bankers with a group of miners, for whom no one voted.

Over the years, these miners have undermined the ecosystem of bitcoin: they do not miss important software updates like SegWit, threaten with meaningless hard-horns, sow fear, uncertainty, and doubt to get more coins at a reduced price.

What if there was another way? What if you could create a system that would forever change the economic landscape of the world? The key point is the distribution of money directly at the time of their creation.

And the very first group, which will understand this and realize it, will be able to change the world.

To understand why you need to see how money is created and get into the system today.

The Big Pyramid

Today, money is born somewhere in the top and flows down to everyone else. Imagine this as a pyramid.

No wonder the great pyramid with an all-seeing eye is depicted in dollars.

One of the most trivial arguments against bitcoin is that it is supposedly a pyramid. The creators of the classic trading pyramid attract as many losers as possible, paying them more for attracting new simpletons than selling goods or services. In the end, people who could replenish such a system end up, and it collapses like a house of cards. In fact, in the financial pyramids with the involvement of the initial investors, the false incomes from investments are the same: afterward, they lure an increasing number of new simpletons, admired by "huge incomes".

However, the irony is that the fiat currencies, that is, government money, such as the yen or dollar, are even closer to the pyramid scheme than bitcoin. Why? Because fiat money is minted in the upper part of the pyramid by central banks, and then they are taken in insignificant quantities to everyone else.

The problem is that the money is not flowing well.

Money passes through large banks that either lends them to people or give in exchange for labor. In fact, getting a job or a loan is the main way to get money for those who are in the lowest part of the pyramid. In other words, these people sell their current time or their future time for money. In this case, the time allotted to a person is a limited resource, and you can sell it only until it is over.

Let's imagine the economy is like a game. Any person in the system is a player who aspires to maximize his advantage, as well as the advantage of his team in order to get more money. However, to start the game, you need to first distribute the money, otherwise, no one will be able to play. The distribution of money is like defining the boundaries of the playing field.

So, if you were responsible for the money, how would you distribute them online? You would want to save as much as possible for yourself and therefore establish rules that maximize your benefits. Yes, that's what you would want to do! This is what anyone who is in their right mind would do - maximize their power and keep it as long as possible.

This is what the kings and queens of the ancient world have done, and this is what the states are doing today. As Nawal Ravikant said in his epic series of tweets about the blockade, today's networks are managed by "kings, corporations, aristocrats, and bandits", and "the rulers of these networks are the most influential people in society."

That's why all the systems in the history of the world distribute money in one single way - from the top until down.

Because it maximizes the advantages of kings and bandits at the top.

Unfortunately, it means that most money never leaves the top of the pyramid. They remain there as a lost and frozen potential, which is never realized. Too little incentive for the movement of money. Since money is power, their accumulation is like accumulating more power, and no one will give up this power of their own free will.

Other words, the money game in the real world begins with a fraud. We need a way to restart the game.

Until now, our prospects in this respect have looked rather dim.

For example, we could adopt the Universal Basic Income (UBI) law. In this case, each person could receive a flow of money, put him on the "playing field" and get more opportunities to participate in the system. Participation of more people in the system would allow unblocking all kinds of hidden and unused value.

How many great inventors have not managed to make another breakthrough, because they lived in daily routine, working seven days a week to feed the family? They did not find a free time for themselves and never saw a clear way out of debt. How many great writers went to the graves without writing their great novels? How many scientists have not discovered drugs for cancer or heart disease?

The problem with implementing all the previous plans, from UBI to socialism (when higher taxes are imposed on rich people, so that money and goods in the game are distributed evenly) is that it is impossible to fix the distribution of money after they have already found their owners. People who have already received money rightfully resist their redistribution. Margaret Thatcher said about this:

The problem of socialists is that, in the end, they run out of money from other people.

But what if the money has not been distributed yet? What if you do not need to take money from anyone?

This is the most missed property of all today's digital currencies. Crypto-currencies create new money. Unlike financial institutions in the credit market, which usually only pretend to be able to increase the money supply, cryptocurrency systems do print money. And they do not give them to people in debt - they give them for the work of network maintenance.

It's like microloans without loans itselves.

Nawal Ravikant said:

Society gives you money because you give it what it wants. Blockboys give you coins because you give the network what they want.

Maybe there is a better option than giving all the money to a small group of miners? There is - much better.

There is such a project, Cicada, which turns the idea of mining upside down. According to this, all participants in the network must be ministers and each network member should have no more than one miner. Miners in such a system are randomly selected and ensure uninterrupted network operation. They do their own business, they walk and drink coffee until their phone signals that it takes a few minutes to work for the benefit of the network. Soon he "falls asleep" again. As a reward people get new coins for the fact that their phone was installed in the proper application. Simple, isn't it?

Because everyone is involved, everyone gets paid and is in fact in a system similar to UBI, now.

And this is only one of the ways. Dozens of others can be invented. And don't think that identification will be mandatory: you can randomly select the miners without it. The main thing is to free the mind from what Satoshi suggested and to come up with something new.

We need to gamble a wide distribution of money at the time of their creation!

Money can be given out as a reward for using applications, or as distributed commissions for mining, or as commissions for mining for organizations that provide value to the network - and this is just the tip of the iceberg. There are thousands of ways, we just always looked at the problem wrong.

In other words, we all missed what the real power and power of Satoshi Nakamoto's brainchild is: this is the proper distribution of money.

The first system, which can truly verify the distribution of money, is guaranteed a rapid takeoff, and it will radically change the current system for the better. "The initial playing field" will be established dynamically, allowing to compete successfully with those people who could not earlier take part in the game. The more players, the more effective and valuable the network becomes.

Networks should have a "network effect", and adding each new member increases the value of the network for all participants.

Until we add new members to the network of the future quickly enough, and these systems are still vulnerable to violent intrusion. The gamification of money can lead to exponential growth.

If the system is able to grow rapidly to a sufficiently large size in a fairly short time, then it will most likely turn into an irresistible giant, and all the rest of the economic space will have to move to a new playing field, that is, to accept its game rules.

When such giants as Amazon and Google join the game field, their instinct of self-preservation will make them take care of this field. And this new network will behave differently. Instead of rewarding only people at the top who always turned the rules in their favor, the game will completely reboot with a new set of rules.

As a result, the network will remain the entire network and not just a narrow circle of people at the top.

Blocking is a new invention that allows worthy participants of an open network to manage it without any bosses or intermediaries. The block is protected from unauthorized access, it is open, it is based on voting and is able to take into account the merits of users. Deserved users are those who work for the benefit of the network. Open and honest blockbuster markets will replace those previously controlled by kings, corporations, aristocrats, and gangsters.

Participants who join the network and help it grow will thrive along with it. This will also increase their own value. Even the small contribution made by them to the system will be rewarded.

And on the other side, the economies that try to harm this new network will pay a high price. The system will stretch around the world, but in the end, only its most important rules will take root since a universal consensus is required to update the distributed system. Since people can agree only on really significant, important for all issues, harmful and meaningless rules will be doomed to failure.

Suppose that the state decides to restrict the ICO for its citizens or make the cryptocurrency illegal. This will not kill the network, but it will seriously damage the creators of such rules. Only citizens of this state will suffer because they, for example, will not be able to use the potential of the ICO, and the money will go to a competing economy. And if the government makes cryptocurrency illegal, they will simply go underground and the treasury will receive fewer taxes.

As this system spreads, people will regain control over their own financial power. No one can take money from people. And this is good.

Of course, not everyone thinks so. Some people think that people will use their power to harm and commit crimes. However, bad deeds and bad people have always been and will be. Adjust the whole system for the - insanity. This approach has never worked and will not work again.

There are people who will never believe in the new system.

They unquestioningly trust only centralized power. It is enough to provide an on-duty argument (protecting children or combating terrorism - it does not matter) - and half of the time can be deceived by half of the population, promoting the most terrible form of power.

At the same time, I found that people who are looking for answers to all the questions in a centralized system usually lived their whole life in such a system in conditions of stability. A few days of instability - and their opinion is drastically changing.

Do not you believe me? Imagine that you live in Syria.

Centralized infrastructure is destroyed, you have no money. You do not want war, but there's nothing you can do about it. Your house is no longer there, your friends and family are dead, your banks are bombed and you are expelled. You are at a dead end: you have no home, no money. Nobody wants to help you, and everywhere you are being blocked. You are not expected anywhere, you cannot stay where you are, and you are ruined.

And what would happen if your money continued to exist in the detachment? You could download and restore your wallet, enter a code phrase and gain access to your funds. How much easier it would be to start a new life!

Crypto-currencies finally give us the opportunity to control our own destiny. For the first time in the history of the world, we have a way to generate and distribute money without the involvement of the central government. People will be able to control the money that they rightly deserve.

And, even better, instead of playing with the original juggling, we can make the game as it should be: with open competition and flexible rules in a dynamic system where there is room for everyone.

However, we need to think through everything and find a way to distribute money in a new way, without taking them away from other people. By doing this, we can forever change the global monetary game. And centralized money is a chain.

Break this chain - and you will free the world.

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