Jason Dookeran

The Cyclical History of Distributed Ledgering Blockchain technology is the major technological innovation that caused the rise of the popularity of bitcoin and other altcoins. However, the truth of the matter is that the technology that bitcoin represents is not new technology. If anything, we should be calling it rediscovered technology. Just like everything in nature goes through a cycle, technology too has a cycle, and humanity has the benefit of being able to retrace its steps and look back at the roads less traveled. So exactly how old is distributed ledgering? To answer that question we need to make our way to the Micronesian Island of Yap STONE MONEY AND THE ISLAND OF YAP Fig 1: The Currency of the Island of Yap [Wikipedia] While there are many things that the island of Yap is famous for, in the currency world, their money is legendary. See, there are no quarries on Yap, but Yapese money is a single stone disc, sometimes as much as twelve feet in diameter. These were painstakingly quarried from nearby islands and brought back to Yap to serve as a placeholder for value exchange, so in effect, money. The curious thing is that the Yapese don't walk around with these things (where would you even find a wallet to fit a 12-foot wide stone disc?), but instead announce to all present that a particular person now owns a particular part of this particular stone disc. One of these discs actually fell off the island during one of their earthquakes, and so technically no longer exist to be seen, but the people still refer to the owners of that particular disc as the owners. The presence of the disc is not even that important. Start to sound familiar as yet? Those of us who understand bitcoin can see the similarities between these two currencies separated by thousands of years almost immediately. And it's here, in this concept, that we see the beginnings of stone-age blockchain technology. All of the people who live on Yap are like all the different computers that know the order of the blockchain and the transaction history. In case someone forgets who owns part of a disc (a bitcoin), they can ask someone else who is likely to remember. Every time someone makes a transaction they announce to the entire island (the blockchain) that they are relinquishing a portion of a disc (bitcoin) that they have shares in to someone else, thereby updating the information for everyone on the island, like the blockchain does. The only difference between these systems in this simplistic example, is that the blockchain, being maintained by computers, is a lot more effective at keeping its records straight. We’ve managed to upgrade one of the world’s oldest systems of money to be used together with our greatest invention to date, The Internet. EVOLUTION OF SYSTEMS IS A NATURAL OCCURRENCE Fig 2: James Watt’s Steam Engine [University of Houston] The innovation of the Island of Yap was forgotten for many years by so-called modern society as we adopted what we understood as commodity money. Commodity money had its value based on a particular commodity, but the drawback here was that a country could only produce as much currency as it owned a particular commodity. At the end of the Second World War, none of the European combatants could manage to raise enough commodity currency to rebuild their countries and so they switched to the system we currently have today, fiat currency. Fiat currency is based on the strength of a country's economy - the more productive that country is on the world stage, the better its currency does. The problem with fiat currency is that it has a tendency to become bloated (something called inflation) and that leads to a general devaluing of the currency over time. Eventually, it will be unsustainable to maintain the fiat currency system simply because keeping it operating would require too much money to be printed which in turn devalues the dollar even more. it's a comedy of errors. Cryptocurrency is the next obvious step in the evolution of money. Humanity has made society as stable and thriving as it is today by embracing new technology and adapting it to a use that best benefits society. Take, for example, the evolution of farming from the early days where a single field could only produce a certain amount of crops and those crops and the farmer invested in them were at the mercy of the elements and the climate. Humanity realized that in order to grow past their then population cap, they would require more food. Thus selective breeding created higher yielding, more resilient crops that could feed more people, known as the Agricultural Revolution. In addition to this, further down the timeline, the Industrial Revolution allowed humanity to cut down the amount of time needed to go into farming, making farmers more efficient in producing crops for consumption. Even today we have agricultural research going into all manner of things to improve our production even more and to replenish the soil faster than humans ever have in the past. Humanity's urge to innovate to improve itself has led to innovations that have allowed us to grow well past what we once thought was possible. THE FUTURE OF CURRENCY Blockchain technology and the growth of cryptocurrency has taken the world by storm, partially because of hos innovative it is as a technology and partially because it gives power back to the consumer, the everyday user like you and me. Never before in human history have the regular people had access to a currency that was not controlled by the elite. This opens up a lot of doors to not just me and you, but to people in impoverished countries that can't count on their government to maintain the value of their local currency. In all of history, humanity has been searching for a method of offering freedom to a market, and while we had a sense of freedom in many major countries around the world, the world's first, truly free market can only be a reality if there is a currency whose value cannot be controlled by any state entity. Now, we have that currency and that opens up the door to all sorts of innovations, research, and development that can be funded by anyone, without having to worry about if the currency will hold value in a long-term setting. Blockchain is the innovation that allows us to cut out the middle men, and as angry as they are about it, there's very little they can do to stop the inexorable tide of innovation that will lead to the world's first truly free currency.