Money progressed naturally from rare metals, to centrally managed IOUs, through to the twentieth-century digital equivalent. Emerging in the twenty-first century we now have decentralised money and cryptocurrency . The effect on money, will be as the internet was for information: global access, frictionless interaction and a diffusion of authority.
Cryptocurrencies have the unique ability in the digital realm to create scarcity of objects — a vital requirement of any money. They self-regulate, meaning there is no requirement, and indeed no effect, from regulating it as a money by law, except perhaps through blunt prohibition though even that is extremely difficult to enforce.
This revolution comes with the risk of major disruption to social fabrics and institutions. Existing financial systems, for instance, are challenged by the presence of a peer-to-peer money. They will need to adapt for the sake of their own businesses and everyone else who is invested with them, including most pension holders for example.
The same concern extends to administrative and governmental organisations. The future will look different, and that is why it is so important we build it in a way that doesn’t break the things that work well and improves the things that don’t.
Financial privacy is going to change in the future. While it is crucial for individuals, in a progressive society it is incompatible with public institutions, by definition. I would advocate for public bodies to put their accounts on transparent public digital ledgers to avoid the kinds of corruption we saw in the Panama Papers. The more sinister twist of this future is for governments to require their people to operate their private business on a transparent ledger. The UK and China have already experimented with such ideas in the tracking and delivery of welfare payments and in universal social credit schemes. There does not seem to be any evidence of grass roots movements calling for public institution transparency.
Decentralised, peer-to-peer systems are a new frontier for society and represent huge potential for how we organise and automate our interactions. It’s crucial we work together in an open-minded way to explore and encourage the healthy and productive development of this technology.