A LITTLE WHILE ago, IOHK CEO Charles Hoskinson gave a short speech to a cryptocurrency event in Hong Kong. Hoskinson is one of the biggest names in the cryptocurrency community, and is known for his work on Cardano, a relatively well-known cryptocurrency that’s currently attracting a lot of attention.
During his speech, Hoskinson made a couple of interesting observations. The first comment involved real world MSME commerce: “It was inconceivable 35 years ago that someone living in Hong Kong or Australia could have business partners in a hundred different countries as a small business,” Hoskinson said. “Now, this is a fact of life for millions of people.”
The second comment, however, was more prophetic and perhaps a little ominous. “The world is moving towards a digital reality. Cash is dying,” Hoskinson proclaimed.
Now, for the vast majority of Filipinos, these comments probably mean nothing. After all, if the entire crypto-market crashed tomorrow, the vendors at my local market will not stop selling their wares, nor will people stop buying with cold, hard currency, and for the vast majority of Filipinos and (indeed people all over the world), cryptocurrencies might as well be abstract concepts from another planet.
But cryptocurrencies are more than just bits of data on the internet. The systems, algorithms and technology that allow them to work may lead to a world where corporations and even states cease to exist. And if you think this is ridiculous, just remember that corporations and nations-states are only a few hundred years old. They are relatively recent developments in the grand scheme of things, and they can easily be replaced by new systems and ideas.
Cryptocurrencies are among these ideas. Unlike coin and paper currencies, cryptos are based on non-hierarchical, decentralized and (mostly) anonymous online systems. Instead of a Central Bank, they use blockchains and consensus mechanisms. However, their most important feature is that they are outside the traditional monetary system. Sure, they can be traded on electronic markets, but crypto blockchains and “ecosystems” can exist independent of investors and traders.
They exist because people use them.
If this sounds irrelevant to you then consider this hypothetical scenario. Imagine if tomorrow, the Philippine government lost all control over the peso. Also, imagine that the value of the peso will be decided by a decentralized, anonymous network that’s tied to the cellphone of every Filipino.
This is what will most likely happen if Hoskinson’s predictions come true. However, the process won’t end there. If people can create a system that allows people to use money without oversight or guarantees, then it’s possible to create societies that operate on similar systems: decentralized, voluntary and quite possibly stateless. Such societies – if they are indeed feasible – will not be utopias but they will be radically different from what we have now, and that’s something worth thinking about.
As I wrote earlier, states, corporations and indeed, fiat currencies, are relatively new inventions, and new inventions tend to get replaced by newer, shinier toys. It’s just a question of when and how./PN
