The Future of Money Is Programmable With Open Architecture

Cryptocurrencies are the first step towards democratizing money.

Carbon Radio
Jan 19 · 7 min read
Photo by Dan Meyers on Unsplash

“The universe looks more and more like a great thought rather than a great machine.” — Sir James Jeans

In 1902, James Jeans put forth a theory in astrophysics that today seems applicable to economic theory. Jeans suggested that there is some radius of a cloud of interstellar dust where thermal energy per particle equals gravitational work per particle. At this critical length, the cloud does not expand or contract. Perhaps more significantly, Jeans suggested that if a cloud lacked the necessary thermal energy, or pressure, to counteract the gravitational force, then the cloud would begin a process of runaway contraction. While this analogy might not be clear at first glance, the idea of “runaway contraction” is something that can be easily understood in the context of economics. In economics, we fear runaway contraction like the plague. More precisely, we fear runaway contraction in economics, because we know what it leads to — The Great Depression.

“The importance of money flows from it being a link between the present and the future.” — John Maynard Keynes

The theory put forward by James Jeans is absolutely relevant to the future of money and by extension our development and adoption of cryptocurrency. The nature of cryptocurrency is a lot like the cloud of interstellar dust that Jeans describes. Cryptocurrencies use decentralized control, and the blockchain associated with that decentralized control is ever-growing. However, unlike the current system dominated by central banks and banking corporations, cryptocurrency would never allow runaway contraction, because it is programmable with open architecture. This actually makes cryptocurrency, at least in theory, less vulnerable and more resilient than our current digital currency system that has centralized control.

Neha Narula | The Future of Money | TED@BCG Paris | May 2016

“We’re about to enter a new phase of money. The future of money is programmable. When we combine software and currency, money becomes more than just a static unit of value, and we don’t have to rely on institutions for security. In a programmable world, we remove humans and institutions from the loop. And when this happens, we won’t even feel like we’re transacting anymore. Money will be directed by software, and it will just safely and securely flow.” — Neha Narula

Neha Narula goes on to explain how today’s cryptocurrencies are just the first iteration of a process that will lead to a programmable and democratized monetary system. Imagine a world where a Great Depression is simply not possible because we have programmed safety nets into our monetary system that are triggered automatically. We wouldn’t have to wait for policymakers to decide where to inject a stimulus or decide which companies to save. It is conceivable that the future of money could create unprecedented stability in our economy. Likewise, imagine a world where hyperinflation is not possible because the program simply doesn’t allow it. If we can program our monetary system using open architecture, we can make it so those bad actors, natural disasters, terrorists, and the likes cannot negatively impact our monetary system and by extension our economy.

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