Beyond Faster Horses
Tracing the Unconventional Path of Technological Change
Technology drives change in culture, politics, and world affairs. The printing press shifted the power balance away from the church, opening the door for the Renaissance and a surge of science and art. The steam engine brought into existence the Industrial Revolution. The telephone and telegraph shrank the world, making communication possible in moments instead of days and weeks. The internet and cell phones provided billions with instant access to knowledge. All of this resulted in profound changes in the day-to-day lives of billions of people.
Therefore, It’s not a stretch to say that technological changes to money could have similarly profound effects, leaving legacy systems in the dust. Alexander Graham Bell thought telephones would transmit music like Spotify in the 1800s. The cell phone is still called a phone when that is only a tiny part of its current function. Ford said, “If I had asked people what they wanted, they would have said faster horses.” What holds most people back is a lack of imagination about how the technological transitions unfold.
Amazon started as an online bookstore and grew up dominating retail. Netflix read the writing on the internet wall and switched from DVDs to streaming services. Elon cracked the problem of sending men and materials into space at a significantly reduced cost, making space exploration economically practical.
Change and innovation create the future. Many would like to think war and power define the future, but this is inaccurate. While the war was the impetus for much innovation, the unfolding of technology has a much broader impact. Fear of a nuclear strike was the impetus for the internet and the interstate highway system. While the fear has waned, the technologies left in its wake are staggering in their impact on humanity.
Folks who say the introduction of Bitcoin will not impact the US economy lack the ability to read the writing on the wall. While many of the wall readers are equally deluded about how Bitcoin will impact our future, reality will come down somewhere in between. Satoshi Nakamoto’s white paper on Bitcoin stands out for its innovative approach to solving the challenges of creating a digital currency without relying on third parties. Its introduction of concepts like blockchain, Proof of Work, and decentralized control laid the groundwork for developing the cryptocurrency ecosystem. For those who say it’s a passing thing, read the paper and do the math; Bitcoin blockchain is a technological innovation that is not too hard for anyone to understand. Not to be confused with all the other wannabee cryptocurrencies that are questionable at best. And while I believe DeFi is a worthwhile field, it is too early and immature to impact the legacy monetary system substantially.
Having said that, using logical inference and history, a new monetary system looks likely. Possibly, a currency that provides a store of value does not need to be the same currency we use as a medium of exchange or a unit of account when interconnections can be programmatically applied based on a globally agreed set of rules that math rather than any nation controls. Yes, the agreement part is challenging and time-consuming, but it works. Thirteen years of Bitcoin proved that.