I’ve been reading The Internet of Money by Andreas Antonopoulos recently.
In the most recent chapter: Bitcoin Design Principles he makes some interesting points about how Metaphors for Bitcoin (such as 'wallets') are probably mislead people about what Bitcoin is!
You can buy the book here, it’s based on his lectures from a few years ago now!
In the latest chapter Antonopoulos makes one of the most compelling pro-crypto comparisons with fiat yet!
Money as a Content Type
Bitcoin transforms the concept of money by making it completely independent of the underlying transport medium and turning it into a stand-alone content type.
A bitcoin transaction is a signed data structure that can be executed anywhere in the world. A bitcoin transaction does not have to be transmitted on the bitcoin network, it only has to reach the miners and be included in a block.
All the Bitcoin network does Is forwards transactions and blocks. A transaction can be transmitted over any form of communication medium.
A bitcoin transaction doesn’t incorporate security mechanisms itself. The security is in the proof of work provided by the miners, and the digital signature on the transaction is put there by end users with keys that they store. There’s nothing sensitive or secret in the bitcoin transaction.
Credit Cards: Insecure by Design
If you use a credit card you will fall into one of two categories: you have been hacked, or you will be hacked.
When you buy something with a credit card online you have to give away your name, address, card number, expiry date and 3 digit CVC code on the reverse of the card: basically all the data someone else needs to use your card to make a purchase for themselves.
When I make a purchase with a VISA card I essentially hand over my keys with it, and rely on encryption along the chain of sale to keep my data safe as it is passed from agent to agent. If encryption fails at any point, my data is vulnerable.
Even worse, some companies store my credit card data, making this a target for hackers, something which has happened a lot in the past.
It is impossible to secure this kind of (lack of security) system from motivated hackers, we simply do not know how to do it!
This is a very insecure system.
Bitcoin Transactions: secure by design…
In contrast, Bitcoin transactions contain no sensitive data: all a message broadcast on the BTC network contains is a reference to an existing (unspent) amount of money related to one address and a reference to where the money is being sent: delimiting who can spend that BTC. The private keys are not broadcast as part of the transaction message: anyone can see it and they can do nothing with the information.
Governments cannot stop BTC transactions
This is because the information required to send BTC is separate from the BTC itself, and it is only the information that has to be broadcasted to BTC miners for the BTC to be sent from one address to another.
You can theoretically encode the 256 bytes of information required to send BTC in any communication medium: Facebook, Skype, Wikipedia and so the only way to stop BTC being transacted is to shut down the internet itself.
It’s even possible via shortwave radio.
Separating the Medium from the Message
When the medium of communication is expensive the messages that get produced are controlled by wealthy elite gatekeepers: this happened with the printing press and the bible - those who control the medium conflate the messages they want to produce as having value and assume everything else is relatively worthless, and thus not worthy of being communicated.
Today with social media the cost of communicating is worthless and so we have billions of messages sent via social media everyday, many of them glib and just for fun, but we would be mistaken to assume that just because there is no longer a cost to producing messages that they do not have value.
The tweeting during the Arab Spring proved this - and it would be a mistake on the part of the elite news media who control the more expensive to produce TV news that their version of reporting has more value just because it is more expensive to produce.
Cheapening the message means more vulgarity, sure, but there is value in there too. Crypto means the meaning of money is now free from the medium
In the fiat world global finance networks determine that small transactions aren’t worth sending internationally because the fees make sending them pointless.
However with crypto, we are able to send $0.10 transactions on the same network as $1M dollar transactions ({obviously dependent on the crypto). It makes doing things like tipping on microblogging sites for just a few cents possible.
The grand arch of technology
Only grandparents use cheque books, only grandparents watch Fox News, only Grandparent financial institutions cling to the idea of FIAT banking systems.
Thoughts
This is a nice reminder of just how insecure the fiat money system is, and a reminder that it only makes sense for those in power.
Now we have crypto, decentralised security is simply much more secure than centralised fiat ‘security’, and it’s cheaper to use.
This seems like a very rational argument for crypto and against FIAT!
