Bitcoin, Digital Currencies, and the End of the Financial Stone Age
As time went on and humans advanced, so did the age. From stone age to bronze age and then iron age, each epoch was defined by the rock or metal we used to advance ourselves.
Fast forward to today and it can be difficult to determine exactly what age we are in. One possibility could be the oil age since its the lifeblood of our current global engine, whether it be powering engines across the economic landscape or being used to inundate every corner of our world with plastic, oil has a global impact unmatched by most materials or concepts.
Or perhaps the evolution of man is speeding up and we are already out of the oil age and are now firmly in the digital age. One could argue that there is little else on the planet earth currently having as big of an impact on evolution as the world wide web. The internet is connecting every inch of the globe bringing information and access to areas its never been before.
What if we were to judge the age of man based on that which was used for trade and barter: currency. Here again, much of history has been dominated by the ages of stone and metal. We could currently be in what is considered a wood/paper age interlude to what is an overarching golden and silver age, as the most consistent stores of value over the past few thousand years have been gold and silver.
Sure, a look at the economic records would show cyclical patterns of the rise and fall of various fiat or ‘paper/wood’ currencies, but the global financial system has had an underpinning of mainly gold and to a lesser degree silver.
So by that logic, we are still in the financial stone age.
But that too is changing, and once again we have the internet and the digital age to thank for it. As a matter of fact, its probably been at least 40 years since the dominant portion of the world’s money supply was represented by gold, silver, or printed fiat notes.
While many Fed bashers still say the Fed continually turns on the printing press, even they know the reality is much simpler in that they just add zeros on a computer screen.
The fact of the matter is that as human society continues to evolve along the digital path, the store of value is going to become increasingly digital.
While Bitcoin wasn’t the first digital currency to be created, it was the one that was successful at launching onto the world stage and not being disappeared from sight by the almighty Dollar. It was so successful in fact that now you have governments and central banks around the world scrambling to release their own ‘central bank digital currencies’ as they race to keep the wealth of their countries within their borders and not in a borderless, trustless, decentralized financial system.
The financial stone age is coming to an end and the digital financial age is upon us, and it is rooted in blockchain. As with any transition from one large system to another, it will take some time and there will be struggles, setbacks and strife. That being said, it will not be stopped as long as electricity flows and the internet facilitates its global web of connection.
Published at Fri, 27 Dec 2019 02:34:13 +0000
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