That's not clickbait. It's fact.
I understand. The idea your grandparents utilized crypto sounds all wrong! Of course, Bitcoin is considered the first cryptocurrency, and it was not launched until 2009. While today's crypto is certainly as potentially profitable as it is supposedly secure, I pondered how the creator of Bitcoin could have been influenced by technology of the past. I swiftly came to a realization that was always in the open.
Our grandparents were crypto specialists with a particular consumer commodity; Frequent Flyer Miles.
Airlines and credit companies introduced frequent flyer miles circa 1980, rewarding purchases of tickets and goods with credits. The credits were solely useable inside the closed-loop systems maintained by company relations and customer loyalty. For a customer to earn a point, they must commit a purchase that is properly recorded in a ledger. While the purchase of a product is proof-of-work by providing the value of earned fiat currency, the flyer miles are awarded in a proof-of-stake method.
So, how is that the same as crypto?
Let's do a linear breakdown of this comparison.
Proof of work: You -> give currency -> get ticket
Proof of stake: ^- electronically earn miles you unlock and use per the airline's/credit company's terms
Proof of work: You -> use energy to mine crypto blocks-> get block reward
Proof of stake: ^- electronically earn miles you unlock and use per the airline's/credit company's terms
Airline miles are definitely what you would consider centralized. You depend on an airline to store your miles, to protect it, to provide it upon request. The reality of airline miles is that the proprietary companies could go under, the miles could expire, and all businesses reserve their rights to change or even eliminate value programs with neither consumer compensation nor input. These electronic points are imaginary assets only truly valued by the amount of energy used to store and access them.
This centralization was met with the human desire to trade any and all things of value, creating what I would consider the very first cryptocurrency.
Fine Print Stops No One
Selling or bartering awarded airline points is strictly prohibited by providers, but I'll tell you what, I would bet a dollar your grandparents who have flown in the past thirty years have committed this forbidden deed. While it would be up to a legal interpreter for personally bartering miles to be considered an illegal activity, there are several ways companies have committed fraud by utilizing miles on accounts not tied to company funds. Federal crimes are not a great idea, but swapping a round trip for groceries could provide a lot of savings! Imagine how much this caught on!
In the first twenty years of their existence, 9.77 trillion frequent flyer miles were awarded to customers.
Currently, flyers collectively earn 500 billion miles annually, averaging over 11,000 miles earned per customer, per year. You can easily imagine the incredible need for the security of this assumed asset. Although miles have no inherent price, millions are spent to encrypt and audit this data. Perceived value is real value as long as someone agrees, and if airlines "lost" these points, the world would be in an uproar.
Here's your homework:
Ask your elders about their experiences with the rollout of frequent flyer miles. Learn where they went, who they met, and maybe even how they bartered their precious electronic miles!
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