BEADS TO BITCOIN Series Introduction: Money as Tech - Who Benefits?
As a fan of history (and markets and politics and economics and technology), when asked to explain bitcoin, I’ve always found myself having to go as far back as prehistoric times or the roman empire to illustrate certain aspects of bitcoin. Often, I would reference the ‘07-08 global financial crisis to illustrate this aspect of bitcoin (in essence, the event out of which Bitcoin was born)… Or I’d involve a point in time just a few decades prior when America spent more dollars to finance its war in Vietnam than they had gold reserves available to back them–they, of course, denied it, but after the French famously called their bluff, the US was forced to discontinue the redeemability of their dollars for gold in 1971–to explain another aspect of bitcoin.
At other times, I’d have to refer to Executive Order 6102, when in 1933 FDR made it illegal for private citizens to own gold, to explain yet another area of bitcoin. Or I’d need to get into the age-old Game Theory problem of the Prisoner’s Dilemma and The Byzantine General’s problem to explain yet another aspect of bitcoin… In sum, I became a human case study in how to make an interlocutor’s eyes glaze over. (Needless to say, I became a far better–or at least more attuned–conversationalist as a result. But I digress.)
When trying to explain Bitcoin to a western audience (who’s never had their life savings disappear overnight due to wild government currency devaluation/ hyperinflation–as is currently or has very recently been the case in dozens of nation-states), each aspect of Bitcoin’s brilliant design became a history lesson in fiscal mismanagement, human greed, MMT (Modern Monetary Theory) vs. Austrian economics, fractional reserve banking, and so on and so forth.
Every time I’ve been asked to explain bitcoin–and yes, sometimes it is an actual conversation, as opposed to me just proselytizing to anyone who will listen–I found myself having to first and foremost explain some aspect of history which created the need for bitcoin in the first place: a need that most of us in ‘democratic’ regimes never knew we had… until now.
The fact of the matter is, before it became an entrenched part of the modern welfare state’s apparatus (like education, the military, or the judiciary), money was simply a technology that tended to benefit its users according to what worked best at a given time in history, to a given geographic area of the world.
In sum, I’ve always found that the best way to explain bitcoin was to illustrate those factors–which, since the beginning of humanity, have led to the need for its invention–without ever having to utter the word Bitcoin, blockchain, or crypto.
So here we are, presenting Beads to Bitcoin: A Brief History of Money. This series will cover everything in history that led to the invention of the now household ‘brand’ so you can understand everything you need to know about said protocol. (Without having to get lost in the weeds trying to explain mining, nodes, transaction validation, decentralization, trustlessness, uncensorability, disintermediation or any other aspect of this technological masterpiece which each alone is wont to give us migraines when we consider how to begin explaining them.)
We hope that by the time you’ve read this year-long monthly series, you will understand the rationale behind every aspect of the world's greatest decentralized computer network and digital currency protocol. From block size to the block reward halving, network difficulty adjustments to proof-of-work, and every other invention for which you’ll have likely acquired a newfound appreciation and respect going forward: You’ll be fluent.
(And perhaps–just maybe–you’ll even be able to explain it well enough that even Grandma can grok it!)
Be sure to stay tuned; this is a monthly series and in the next chapter we cover Prehistory, Barter, and Primitive Monies.
Disclaimer: This article is not intended to provide investment, legal, accounting, tax or any other advice and should not be relied on in that or any other regard. The information contained herein is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of cryptocurrencies or otherwise.