The Internet of Money

by Andreas M. Antonopoulos

every 30 or 40 years at least, things that have settled need to be disrupted. Because as they settle, power accumulates, they become centralized, and with centralized power, corruption happens. This isn’t a new concept. My ancestors—I come from Greece—figured out that corruption happens in systems of power, and absolute power produces absolute corruption. There is no more absolute power than the power over money.

Bitcoin is a common resource whose use increases the value of that resource, at the exclusion of no one.

You get this wonderful synergy where each company that invests in this amazing technology makes it better for everybody else. It’s not an exclusionary principle; instead of a tragedy of the commons, you have a festival of the commons. A commons that gets better when more companies use it.

You cannot stop this. That’s why I’m excited to be in the bitcoin space: a dumb network that puts all of the intelligence and innovation at the edge so that we can innovate without asking anyone’s permission, and we can participate in this incredible festival of the commons.

This is what actually happens throughout history when you introduce a disruptive technology. You meet resistance. Resistance is the first reaction.

Money is a shared cultural hallucination. It’s a shared delusion. We walk around and associate with other people on the basis of germ-ridden pieces of cotton printed with green ink. If you were to observe that as an alien anthropologist that landed on Earth, you’d think it was very very weird. That just by exchanging these pieces of cotton, you could create social relationships, transactions, and trade— you could feed yourself, shelter yourself, etc., etc. It doesn’t make much sense but it’s based on a shared hallucination. It’s based on the assumption that if you give me a dollar today, someone else will accept that dollar in exchange for something of value tomorrow. If I still believe that is the case, then it has value. Value comes from the assumption that I can use it again.

You ask people about bitcoin, and one of the first things I hear from most people is that it’s not real money because it’s not backed by gold like the US dollar—which I find astonishing. The dollar hasn’t been backed by gold since 1936. Yet, most people think that somewhere in the vault, possibly at Fort Knox or some other movie location, there are bars of gold that correspond ingot to ingot to the pieces of paper that you have in your pocket. They don’t. There’s no such thing. Why is bitcoin money? Because other people think it’s money. You can write a dozen Ph.D. dissertations explaining exactly why bitcoin is not money . . . and I have lived on it for two years. Therefore, it doesn’t matter what your dissertation says. To me, it is money, because I have lived on it for two years. So have thousands of other people. Therefore, to me, it is very much real money.

so understanding the way traditional money works doesn’t help you understand bitcoin. If anything, it hinders your understanding of bitcoin. The people who understand bitcoin the least are monetary economists. They cannot wrap their heads around it. They will write long theses on how bitcoin is not money, despite the fact that I’ve been living on it for years.

most of the interesting things were not incremental improvements or extensions of the things before. They were radical departures from the past, because they created the conditions for things that were not possible before.

Credit cards are broken by design because the token itself is the secret key. If you transmit that token, you expose your entire account to risk.

Money is now completely disconnected information content. There is absolutely nothing you can do to stop information from traveling from anywhere in the world to anywhere in the world when you have an abundance of fully interconnected multimedia communication mechanisms as we do today.

We read our books electronically. Some people say, "There’s something about the feel of paper." Yes. It’s too heavy to carry 20 books in your bag, and I read 20 books in four or five weeks, so I need to carry that many. There’s nothing about the feel of paper; that’s clinging to the past.