Money, Cryptos, and Blockchain from Times Immemorial to Date

What's the colour of money? 'Crypto,' she said. Not green, nor copper, nor silver or gold. Just crypto. But what makes cryptos interesting? Well, first of all, unity and decentralisation. Why have millions and billions of currencies when we can all have one? Aren't you tired of being charged high exchange fees every time you travel abroad? Of course you are. That what cryptos were developed for (or should be if we went all crypto) - make you the master of your own finances, no more banks, credit card companies, no more middlemen and burdening transaction fees and exchange rates. And with the traction that cryptocurrencies have gained in recent years, we may get there sooner rather than later. Before we make any fancy projections for the future, let's see what makes cryptos interesting.

Known by many names, some fancier than others, cryptocurrencies fall into two categories: coins and tokens. How can you tell which is which? Simple. While all cryptocurrencies dwell on distributed networks or blockchains, coins own the blockchain they dwell on. Unlike tokens, which mushroom across different networks, coins are backed by an entire ecosystem to which they are bootstrapped - they exist there and only there. In turn, this ecosystem serves as the sole environment where transactions with that coin can take place securely. This is the beauty of decentralisation, but before we go any deeper into all things crypto, let's do a time-travelling experiment and see what or who was here first.

Who was first, the chicken or the egg?

Or goats, or cows. No, this is not a question of existence. It's a story of how it all started (and how far we've come). At first, long before money, people used to trade chickens for corn, or goats for clothes. Pretty much anything they had against everything else they needed.

Wasn't that decentralised? In many ways, it was. Trade something of value against something else of equal value. That's what barter was, and man, it worked. And it worked well until… money appeared and made the world go round.

Flipping coins, making history

Money changed the world in every way, but above all it changed our perception of value and wealth. Guess who we owe it to? The Lydians. They are 'guilty' for minting the first coins back in 600 B.C. - that's 'Before Christ' not before crypto. What made Lydian coins special was electrum, a special alloy of gold and silver, and the stylised figure of a lion as heads.

The concept of money as a means of value exchange had been quite deep-seated in our ancestors' minds across the centuries. In ancient China, for example, people used shells as currency, and about 5,000 years ago, Mesopotamians had even developed the first banking system where people could 'deposit' grains and other valuable items for safe-keeping or trade. Yup, money's really old. And that was the first attempt of money centralisation.

However, it wasn't until physical coins flooded the markets of the world that money made a social impact. Since the beginning, money has played a crucial role in people's lives not only as a means of exchange for goods and services but also as a value repository and a symbol of wealth. According to Tom Figuiera, Professor of Classics at Rutgers University, money, the emergence of money had a massive impact on the way people perceived value. Essentially, money created 'a whole new way of thinking about value,' he said. Indeed it has. Money ushered in a new era and the brave new world as we know it. And so flipping our coins through ages, we traded electrum for Ethereum… The story continues on the trading floor, on the street, on forums, blogs, in the media, everywhere.

Most crypto exchanges, as financial operations, are subject to a Know Your Customer conditions- KYC is a policy that requires companies to collect personal information and proof of identity. Knowing customers protects crypto exchanges from malicious actions and increases users' accountability.

Back to the crypto-future

Yet why do we need cryptos? Just because they're fancy? Because of Bitcoin, Dash, or Bitcoin Cash? Um, nope. There's a lot more to these digital currencies than meets the...blockchain. First and foremost, cryptocurrencies are valuable because they are pegged to cash (or most of them are, you'll see in the second part of the article that cryptos can even be pegged to commodities as a guarantee of their stability). But how stable can cryptos actually be? After all, cash is the most liquid asset you can have. What makes it liquid? The fact that it changes hands quickly. Additionally, the quicker an asset - in our case, a cryptocurrency - changes hands, the more liquid it is, and hence, the easier it converts to cash without causing major fluctuations in the market. When it comes to cryptos though, things get tricky mostly because they are quite expensive, aren't they? We all remember February 2019 when Bitcoin hit $10,000. One of those moments when you regret not investing in it when it was cheap. Well, time and tide waits for no man, as the saying goes.

However, volatile as they are, cryptocurrencies are no longer a buzzword, they made an impact, brought about decentralisation, and are gradually infiltrating in our daily lives.

The rise of decentralisation

Ever since the emergence of Bitcoin in 2008, 'decentralisation' was on everyone's lips. And rightfully so. Remember that historical moment when someone paid 10,000BTC for pizza delivery from Papa Johns? That pizza must have got some pepperoni topping…You wouldn't do that today when Bitcoin is worth more than $9200, which is a fortune even for the big bucks' earners. But when Bitcoin was the one and only coin on the blockchain, things were different, and January 12, 2009 marks a crucial moment in the history of Bitcoin. It was then that Hal Finney, the first supporter, contributor, and receiver of Bitcoin, downloaded a copy of the Bitcoin blockchain on his computer device and purchased 10 Bitcoins from Satoshi Nakamoto, the mysterious creator of Bitcoin.

But blockchain as technology had its visionaries and supporters even before Bitcoin. Wei Dai, the creator of b-money, the predecessor of Bitcoin, and Nick Szabo, the creator of bit gold, another 'ancestor' of the once and future Crypto Queen, are the first and most prominent ambassadors of digital currencies and the technology underlying them.

Chaining in for a bigger piece of the crypto pie

It didn't take long for governments to see the potential of blockchain and jump on the crypto wagon. Japan is one of them. In April 2017, the country of the rising sun legalised crypto payments under the amended Payment Services Act, requiring crypto exchange operators to register with the FSA. The regulatory body started registering them in September 2017.

China, Hong Kong, and Singapore are also embracing the crypto-change. According to a survey by 21shares, the three Asian countries are rapidly making strides in the direction of crypto economy. Yes, you get it - cryptocurrencies are steadily becoming the mainstream these days. In some countries, at least.

Will cryptos pass the test of time?

However, every brilliant idea has to face the test of time and speed. Because let's face it, even today, a Bitcoin transaction can take between 10 minutes to more than a day to complete, about the same amount of time it took ages ago. That's not so convenient, is it? Especially when you want to pay for your new gadgets that cost a fortune, and you don't want your better half to find out about, right? Yup, you get it, crypto transactions are cryptic, no one else will ever know about your 'secret' purchases other than you and the salesman. Even with Ether, it can take up to one hour, if the network is busy. Not pretty at all!:(

Yes, there is plenty of room for improvement. Nevertheless, blockchain technology, and cryptocurrencies definitely made a statement - there is a new way to pay. Although 11 years have gone by since the first crypto transaction lit up the blockchain, let's face it, cryptos and the technology behind them is still young, and despite the technological advancement that we have achieved so far, we are not quite there yet - above all, psychologically - we are not weaned off the plastic and the leather wallet. And perhaps we'll carry on like this for a good 10 years or so, give or take - in love with cryptos but cash-unweaned. Or maybe not…

The change is coming

Seeing the economic potential of cryptocurrencies and blockchain, companies across industries have started experimenting with the technology and either launched or are currently busy developing their own blockchain and cryptocurrency. PayPal and mobile payment solution provider Venmo are also rolling out direct crypto buying and selling solutions, eclipsing Telegram's TON crypto platform with its GRAM coin, and Reddit's Reddit Coin.

Interestingly, Telegram's TON project was put to sleep after a US court decision 'stopped [it] from happening', said Telegram CEO Pavel Durov in a message to the community on May 12, 2020. But this is only one side of the coin. Durov also mysteriously left Russia after the government in Moscow demanded access to Telegram's encryption keys. Surprised? No. Telegram is one the world's largest messaging apps and a great asset in the right hands... Anyway, Telegram is still 'untouched' and 'encrypted end-to-end'. Hats off to Durov!

Wait, that's not the end of TON's story! While that US court may have nipped GRAM in the bud TON carried on. Startup TON Labs, known to run a test network at the time, dubbed the platform 'Free TON' after Telegram announced further delays with its dormant crypto project. Sleep tight while others fight with all their might.

In October 2019, the Securities and Exchange Commission (SEC) temporarily restrained Telegram's blockchain project, temporarily preventing the company from distributing its GRAM token in the US. And the SEC is only an example of a regulatory body struggling to understand cryptocurrencies. In general, regulatory authorities frown when they hear the very word 'cryptocurrencies', yet people are allowed to buy, sell, trade, and exchange cryptos.

Perhaps a lot more ink will be spilled on the 'legality' of digital currencies before they're given full regulatory blessing in all the corners of the world. As with all things tech, with cryptos, there is a learning curve we need to climb from a regulatory, economic, and financial perspective. And the dice has already been cast. If countries like Japan, China, Hong Kong, and Singapore will go crypto, how long until the whole world goes crypto?

A little while longer…or maybe less. Large credit card companies like MasterCard and Visa have also started marching on the crypto road. Visa, for instance, published its 'digital fiat currency' patent application on Thursday.

MasterCard did not fall behind either. Acknowledging consumers' growing interest in digital currency, the financial services giant announced details of its Mastercard Accelerate programme on July 20. The initiative aims to support the major shift in payments, raising the stakes for cryptocurrencies and crypto wallet company Wirex, which became the first-ever cryptocurrency firm to receive a MasterCard principal membership. Now, that's really BIG! Yet, it's still in the cocoon phase. There is still a lot of development work going on. Until the chrysalid becomes a butterfly, we can continue to enjoy buying, selling and investing in cryptocurrencies in the same good, old way we used to. But about that, cryptocurrency value, liquidity, and how you can benefit from crypto trading in a future article.

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