Memento Mori with manuscript- Image Source: Pixabay

How a 15th Century Manuscript Helps Resolve the Cryptocurrency Argument

History hints at the death of modern banking.

William Wright
Feb 21, 2019 · 8 min read

Where there is no order, there is confusion,” -Luca Pacioli

hen one peers into the past there are examples of the ingenious ones, with ink-stained hands, eyes dimmed from reading too many books who shake things up for others. These bright stars enlighten the masses; and vex the status quo with ideas, inventions, and philosophies.

We have repeated this story many times; whenever a new technology arrives, we replace the antiquated ideas of the past. There are innovators today tipping the applecart with a promise of decentralized Blockchain ledgers that will change how we use money.

The First Accounting Book

A few years after Christopher Columbus made his journey to the New World; an obscure Italian monk named Luca Pacioli wrote one of the most influential books of all time. The establishment of modern accounting begins in 1494 when Pacioli codified accounting principles practiced in his home country of Italy.¹

The methods described by Pacioli became written in a book entitled Summa de Arithmetica, Geometria, Proportioni et Proportionalita (Everything About Arithmetic, Geometry, and Proportions).²

Humanist Ideals

The humanist movement was just beginning in Early Renaissance when Pacioli wrote Summa. The growth of the merchant class in the Italian Renaissance and other parts of Europe helped trade expand and promoted humanism; a philosophical ideology that encouraged the pursuance of pleasure in life rather than conducting life in servitude.³

The Father of Accounting

Modern Ledger- Image Source: Pixabay

acioli likely observed this period with vigor when the exchanging of ideas and sharing information heralded a new era of prosperity that also defined a new relationship between the arts, business, and science. The book-keeping methods he described in Summa were not his own. However, Pacioli has become known as the “Father of Accounting”.²

Double Entry Accounting

A business ledger may seem common sense today, but when Pacioli wrote Summa they considered it the cutting edge of mathematics; the double entry accounting method has been the de facto standard for business transactions for the last 500 years.⁴

The new accounting practices helped provide stability and growth for business; this contributed wealth for developing city-states. This increased standards of living and the formal ledger system helped promote some of the greatest art and music humanity has ever known.

The Summa in Print

When Gutenberg invented the printing press in 1439 he likely did not envision its impact. The printing press distributed Pacioli’s Summa and a host of his other works throughout Italy and Europe.

Just like Pacioli, modern-day innovators understand that sharing information and collaborating are critical for the mass adoption of technology. We live in an Information Age, but the printing press was the first in a wave of many information ages. e.g. Radio, Telephone, Television, Internet, etc…

Hello Nakamoto

Bitcoin Image Source: Pixabay

In 2008 someone published a white paper on the Internet with little fanfare under the pseudonym of Satoshi Nakamoto. There has been much speculation on the actual identity of Nakamoto and the world considers him influential in the proliferation of digital currency.

Like Pacioli, he has written in a time that is experiencing massive changes in society; whereas the humanists espoused classic ideals, the current movement has preached increasing personal freedom and minimizing governmental oversights.

he timing of the white paper also came during a period of unease and mistrust of the banking system; in the paper, Nakamoto describes a peer-to-peer digital payment system based on cryptographic proof instead of trust in the middleman he called Bitcoin. The ideas were not new, but like Pacioli, he wrote existing ideas and shared information of a new decentralized ledger system to replace the aging business model of modern banking.

Incumbent Money

The biggest roadblock to the large-scale adoption of decentralized ledger systems and cryptocurrencies is the incumbent-monies problem; everybody uses fiat money in some form.⁵ It is also arguable that we tie world currencies to the US dollar; the decision to use cryptocurrency is, at least on the margin, the decision to stop using fiat money.

The problem: switching costs and network effects favor the Federal Reserve, International Monetary Fund, World Bank, and other international banking organizations.⁵

Tempt not a Desperate Man

Xiamen- Image Source: Pixabay

History has shown us many times, the currency of a nation can fail and desperation can cause sudden dramatic changes. Following the dramatic debt crisis in Greece, hyperinflation in Zimbabwe and unrest in Ukraine, a rising number of distressed citizens used Bitcoin.

The people of the impoverished nation of Venezuela are adopting Bitcoin en masse after suffering under years of hyperinflation.⁶

The Printing Press is Bad for Currency

he financial education website Investopedia describes hyperinflation as a currency with an inflation of 50 percent a month or more. The prices continue to skyrocket because the government prints more money to cover their expenses and this deprives the people of buying power.

However, if you strip a nation of its printing press, the government can no longer devalue a currency by printing more. The dollar has become the “go-to” funding for nations suffering from hyperinflation.

The country of Ecuador dollarized in 2000 and quickly extinguished hyperinflation; the current Venezuelan regime has no intentions of dollarizing and has even rejected aid from the United States.⁷

Bringing bananas to market in Maracaibo, Venezuela. Source: Pixabay

The Petro isn’t Retro

he Maduro led government of Venezuela has minted its own version of a cryptocurrency called Petro and intends to sell them in exchange for foreign currency.

Maduro claims they are like an “oil voucher”, representing oil from a particular Venezuelan region; this way it can link the Petro, notionally backed by real resources and foreign reserves to the bolivar, arresting its slide.⁸

The Bellwether

A cryptocurrency ATM provider plans to install a Bitcoin ATM in Caracas, Venezuela in the first quarter of 2019.⁹ This single event may be a sign of the death of the Petro and the ill-fated bolivar and suggests that the Venezuelan people are tired and have little faith that the Petro will help them.

The problems of Venezuela’s economy are complex and hyperinflation at the reported rate of 1 million percent for the bolivar has caused survival issues for the people.

Aberrant Treasure

Treasure box- Image Source: Pixabay

he American physicist Thomas Kuhn challenged that gains in science became achievable only because ideas coalesced over long periods of time when he wrote his book The Structure of Scientific Revolutions: he argued that anomalies lead to new ideas and that those ideas then ask questions of the old way of doing things.¹⁰

Blockchain technology is that new anomaly, an “aberrant treasure," that has opened like Pandora’s Box.

Thomas Kuhn states that “ideas will compete to replace one another, and even when there is a dominant idea, alternatives will continue to exist, so long as people continue to create new methods”.¹⁰

This situation is happening now: one need only perform a simple Internet search to find a plethora of various competing cryptocurrencies. There are naysayers and pundits that abound, all with their own opinions and many with valid facts that bolster their arguments in either direction for this exciting technology.

The Struggle

The Struggle Image Source: Pixabay

ust as when Pacioli wrote about revolutionary mathematics in Summa, the new science of Blockchain is being written about and created by the likes of Nakamoto, Buterin, Ver, Szabo, Voorhees, Andersen and the work of thousands of others: our society will benefit from these new developments in digital transactions that occur without relying on trust but in provable math.

The past hints that Blockchain technology will become the new de facto standard for business transactions and it will force the existing financial systems to give up their stranglehold on the people.

The clearest financial win of the common people from the past was when the feudal system of Europe fell apart with the newly formed merchant class. This may have been largely in part because of the double entry accounting system.

These financial rivalries between social classes occur with regularity as society reacts to new technology as in the Industrial Revolution or with changes in ideology as in the Protestant Reformation.

The news channel CNBC reported in September 2017 the top 1% wealthiest portion of the world now own roughly 50.1% of the world’s wealth, a nearly 5% increase over only 15 years.¹¹ The wealth inequality continues to widen, and it begs the question “Could Cryptocurrency be the answer to income inequality?”

The Bondless Class

[Bondless: adj without bonds, unrestrained.]

Pondering change Image Source: Pixabay

ike Venezuela, the rest of the world has grown tired of a devalued currency, generational poverty, and increasing governmental oversight. A new class of people who wish to throw off the yoke of modern serfdom appears to be rising to combat the evils of big banks and big government.

The cryptocurrencies created by this newly formed Bondless Class will usurp the current financial system. Imagine how things might have been different for the past 500 years if Pacioli’s ledgers became distributed and open for the world to see during every business transaction and political campaign.

I predict the Bondless Class will embrace Blockchain technology while continuing with the ideals and principles of capitalism while striving to close the wealth gap. Whether the existing institutions and governments fully adopt, change, or fully reject cryptocurrencies remains an elusive subject.

Help comes to those who are awake, not to those who sleep. -Luca Pacioli


  1. In Brown, R., Mackay, J. S., Boyd, E., Fogo, J. R., Sloan, A., & Patrick, J. (1905). A history of accounting and accountants. Edinburgh: T.C. & E.C. Jack.
  2. Smith, M. (January 01, 2013). Luca Pacioli: The Father of Accounting. Ssrn Electronic Journal
  3. McCarthy, P., Sangster, A., & Stoner, G. (January 01, 2008). Pacioli and humanism: pitching the text in Summa Arithmetica. Accounting History, 13, 2, 183–206
  4. Chatfield, M. (1968). Contemporary studies in the evolution of accounting thought. Belmont, Calif: Dickenson Pub. Co
  5. Luther, W. J. (January 01, 2016). Bitcoin and the Future of Digital Payments. The Independent Review, 20, 3, 397–404.
  6. By CHRISTINE ARMARIO and FABIOLA SANCHEZ — Associated Press. (2017). Venezuelans seeing Bitcoin boom as survival, not speculation. AP Top News Package. Associated Press DBA Press Association. Retrieved from,ip,geo,url,cpid&custid=s7324964&geocustid=s7324964&db=rps&AN=AP9516fd02a5434ef2b9d6b7b39655a8c1&site=ehost-live&scope=site
  7. Coy, P., & Laya, P. (2018). The Hyperinflation Cure Venezuela Won’t Take. Bloomberg Business Week, (4580), 33. Retrieved from,ip,geo,url,cpid&custid=s7324964&geocustid=s7324964&db=f6h&AN=131157730&site=ehost-live&scope=site
  8. New Scientist, 24. Retrieved from,ip,geo,url,cpid&custid=s7324964&geocustid=s7324964&db=ulh&AN=132792140&site=ehost-live&scope=site
  9. Crypto Buyer to deploy first bitcoin ATM in Venezuela. (2019). ATMmarketplace.Com, N.PAG. Retrieved from,ip,geo,url,cpid&custid=s7324964&geocustid=s7324964&db=buh&AN=134232404&site=ehost-live&scope=site
  10. Kuhn, Thomas S. The Structure of Scientific Revolutions. 3rded. Chicago, IL: University of Chicago Press, 1996.

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Coinmonks is a non-profit Crypto educational publication.

William Wright

Written by

Working with Staxe, an exciting platform that combines blockchain technology with crowdfunding for events.



Coinmonks is a non-profit Crypto educational publication. Follow us on Twitter @coinmonks Our other project —

William Wright

Written by

Working with Staxe, an exciting platform that combines blockchain technology with crowdfunding for events.



Coinmonks is a non-profit Crypto educational publication. Follow us on Twitter @coinmonks Our other project —

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