Digital currency researcher Neha Narula delves into the evolution of money, from the Rai stones of the Yap culture to the potential of cryptocurrencies like Bitcoin.
She paints a vivid picture of a future where money is programmable, transactions are frictionless, and large financial institutions are no longer necessary.
The inherent value of money
The Yap culture’s usage of Rai stones as currency highlights that the value of money is based on collective agreement, not inherent value.
These stones were never physically exchanged; instead, their ownership was tracked, demonstrating an early form of digital money.
Limitations of current digital money systems
Current digital money systems, controlled by large institutions like banks and credit card companies, can restrict access and hinder innovation.
The lack of interoperability between different services creates inefficiencies and increases transaction costs, limiting the speed and accessibility of digital transactions.
Cryptocurrencies as the future of money
Cryptocurrencies like Bitcoin, which operate on the principle of a decentralized ledger or blockchain, represent the future of money.
While current cryptocurrencies have limitations, such as slow transaction speeds and high energy consumption, the next generation is expected to be faster, more efficient, and potentially transformative.
