The Internet of Money

by Andreas M. Antonopoulos

Then, we start seeing an even more important transformation, when we move from platforms to protocols. The interesting thing about the change between a platform and a protocol is, when you have a protocol there is no central appeal.

Bitcoin is the first network-centric, protocol-based form of money. That means it exists without reference to an institutional or platform context.

An interesting issue in distributed systems is this issue of context and state. If you log in to Facebook and you have an account with Facebook, you’re not using a protocol. All of the state is controlled by Facebook. You have a login session and all of the data is held by them. We call that architecture client-server.

The architecture of systems is what ultimately produces the outcomes.

The architecture of neutrality that doesn’t ascribe any meaning to source, destination or value, is what creates censorship resistance.

Privacy is a human right and secrecy is a privilege of power, and we need to be in a world where we have complete, ultimate, strong privacy for the billions of people.

the misfits, the weirdos, the freaks. The people who refuse to think the way everybody else thinks. The people who see a half-working, elegant technology and don’t look at the half-working; they look at the elegant side. They recognize innovation.

Do you know what the media said about the early automobile? They ridiculed cars. They mocked cars. Cars were slower than horses. Cars broke down all the time. Cars needed expensive gasoline that you couldn’t find anywhere. They required enormous amounts of infrastructure to work. The media focused on the part of the story that sold the most papers: car accidents, pedestrians mangled by cars. For more than two decades from the first cars, the story was that of infernal, disgusting, dirty, noisy machines that were far inferior to horses, that couldn’t go anywhere, that only weirdos would use, and that, most of the time, killed the occupants and everyone who came anywhere near them. This hysteria got so bad that in 1865 in the UK, they passed a law called the Red Flag Act. The Red Flag Act required that any operator of a vehicle have three crew members on staff: a driver, an engineer, and a flagman. The driver would operate the vehicle, the engineer would supervise that operation (think railroads), and the flagman would carry a red flag and run 100 yards ahead of the car to warn pedestrians of the imminent arrival of an infernal death machine that was going to mow them down. Guess what happened to the UK? They lost the automobile-industry race because they saw that technology and, instead of seeing potential, they allowed fear to define their reaction. They created an environment where a car could not do the things that a car can do. If you make a car go as slow as the pedest...

In fact, by the time they figure out how serious this destruction already is, the game’s already over. That’s usually the case.

Every single financial system in the world has a security and trust model that requires excluding bad actors.

when you architect network systems, one of the most fundamental choices is this: do you make a dumb network that supports smart devices, or do you make a smart network that supports dumb devices?

Often, new technology must first use the infrastructure of the technology it will eventually replace. In the beginning, automobiles had to use roads designed for horses. Eventually, we started paving roads.

Flat, paved roads not only allow the automobile to exist, allow the horse to comfortably exist, but they also open the door for new technologies.

That’s an infrastructure inversion. You start with the new technology living on the old infrastructure and then, it flips. You build infrastructure and then the old infrastructure rides on top, on the infrastructure designed for the new technology.

Enabling the future on your legacy system is very difficult. While you’re trying to do that, everyone is pointing at the future and saying, "Look. It doesn’t work." Once you flip the infrastructure, simulating the past on the network of the future becomes extremely easy.

What we do is we build interfaces, we build abstractions, we build unifying tools that allow us to use all of these modalities from a single interface and fluidly move from one to the other. So, we can start transmitting a short text message to someone, get into a conversation, convert that to an audio conversation, decide that we want to show them our dog, turn on the video camera, convert it into a video conference, and when we’re finished with the conversation, follow up with an email to summarize what we’ve agreed on. Now we’ve gone through five different modalities of communication in a single unified interface.

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.

You see, the medium is the message, as someone famous once said. The primary reason the medium is the message is because the medium constrains, transforms, and in many cases, distorts the message.

What do you think is the immediate assumption that people make in that industry? If the cost is zero, then the content is worthless. That is a fundamental misunderstanding of what happens when you separate the content from the medium. By separating the message from the medium, your perception of value shifts from the cost of production to the value it has to the consumer when they consume it.

They made the mistaken assumption that if the cost of production is zero, the value of the message is zero. They confused the medium for the message. They made the mistaken assumption that their control over the medium was the source of quality. And long after quality disappeared, they clung to control and thought that control was the only way to achieve quality, and if you removed control, you removed quality. That is stinky, unabashed elitism at its absolute worst. It assumes that the gatekeepers are the source of quality, when all they are is gatekeepers. They assume that the fact that they have the expensive medium means that the message is worth listening to.

Every generation mistakes the medium for value and considers the next iteration of the medium—that widens access, that opens availability, that broadens the range of expression—they consider that medium trivial, vulgar, cheapening the message.

Scaling is a moving target. Scale defines the edge of today’s capabilities. As it moves forward, capability increases. The reason for this is really simple: it’s because scale is not a goal to achieve; it is a definition of what you can do with the network today. The moment you increase the capacity, the very definition of what you can do with a network today changes