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Anatha: A Crypto Master Class - 02 Why Cryptocurrency Matters

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Money is the tool that we use for the division of labor which ultimately gives rise to what we call civilization. Money is in fact so important that we most likely invented writing to keep track of it. The oldest form of writing we have, it's a cuneiform tablet, is a banking ledger, and it was there to keep track of who owns what and how much money this person has or versus that person. So, it is a key part of civilization. In fact, I would argue that it is the base layer protocol which gives rise to civilization. And that the properties of that base layer protocol ultimately determine the kind of civilization you get. So, what we're saying here is if we design new money, we're designing a new civilization.

In our current system, it is mostly built off of extractive thinking. We have a system in which a very small group of people, sitting inside closed doors, who you have never met and never will meet, and didn't elect and most likely don't know who they are, will decide the entire inflation and distribution policy of your economy, and in doing so, decide almost every aspect of your life. They'll determine what industries flourish and what industries don't. They'll determine what regions grow and what regions fall apart. They get to determine basically every aspect of what we call the world. And we're sort of just adrift in that. We're victims of it as the past two economic crashes have taught us. There's no way around that, necessarily.

As a great Buckminster Fuller taught us, if you want to make change, don't try to wrestle with the existing system, don't try to get them to change, create new systems which make the old systems obsolete. And that's what crypto has done. And crypto has done it at the keystone problem of civilization, at the protocol level. If you change the protocol of civilization, you can completely determine the kind of civilization you get.

And it's my assertion that most of us are not satisfied or happy with what we have now. Even if you as an individual are doing quite well, I think we could all agree that the fact that nine million people die every year of hunger and hunger-related disease, it's an inefficient outcome at the very least. Or that 500 million people are newly living below the extreme poverty line of two dollars a day as a result of the recent economic crash, that is a less than desirable outcome as a species or as a civilization. I think we could all agree that we could do better.

And crypto opens up the promise to do better at the speed of the information age. You see, joining a new economy simply means installing an application. You already have the information age in your pocket. You already have the devices, the internet is already spread across the globe. It's simply connecting to it in a meaningful way and using the right applications and tools to get the outcomes you want, both for yourself, for your community and for civilization as a whole. Crypto literally will allow us to rewrite what we take as just the way things are, right? The world as you know it is just the way things are!? Well, what if they weren't? What if you could change that simply by installing an app, by making a choice, by putting your economic inputs into something that aligned with your deepest held beliefs and your deepest held purpose? And that's what crypto makes possible.


If your goal of buying cryptocurrency is to have more fiat dollars later, it's a bit like saying, I have this new automobile and it's saving me so much time that I could own more horses. You're looking at the old technology and looking at that as important. So yes, cryptocurrency has an aspect of investing to it. Except, what else are we investing in, right?

You see, when you invest in things you get certain outcomes. For example, if we all invest in Tesla, you're gonna get more Teslas. If we all invest in Microsoft, you're gonna get more Microsoft Windows applications. And when you invest in the US economy, you are ultimately suggesting that whatever the US economy does with its US dollars, specifically, its economic policy, that you're gonna get more of that. Well, what do we get more of when we invest in US dollars? Generally, we get more of burning petroleum because the US dollar is backed by petroleum. We get more foreign wars. We get more oppression. We get more of all the things we don't really align with. And all I'm suggesting is that if we simply invested in something else, that align with our deepest held beliefs, and our deepest held purpose, that we'd get more of that instead. So... Yes, it's about investing, but it's not simply about investing in the traditional sense, where I'm giving you money so that I could have more money later. It's, I'm putting my economic inputs into this, my time, my energy and my resource, with the understanding that I'm gonna get more of whatever this system is designed to create. If your system is egalitarian and fair, and designed to end poverty, then you're gonna get more of that. And if your system is extractive and mean, and designed to fund a war machine, you're gonna get more of that.

So yes, it is about investing, but you've been investing your whole life. The only thing I'm suggesting is that you should be a little bit more mindful about where you're investing your economic inputs. In our current system, we have a small group of people that end up deciding at scale for billions of people. And even if we were to assume that they were the smartest, most well-intentioned human beings on the planet, there's simply no way that they can compete with the brain power, the inputs of hundreds of millions of people.

So, crypto allows for this kind of open expansive contribution which gives rise to at least an early form of collective intelligence. What we discovered in the open source community while we're building these things, is that if you let a lot of people participate and you simply allow all the inputs of a global community to sort of coalesce into one project, that the outcomes you get are far more efficient and far more powerful than anything that even the most well-funded organizations on the planet could achieve. And that's the promise of crypto.

And we have to recognize that these inefficiencies that are caused by current organizations, whether it's in the banking system or government, whether it's in the form of like social aid that they're too slow or incapable of providing, that those inefficiencies harm us and that in doing so they're participating in a violent act. And while we could sit here and say that, you know, they should be punished for it or that we should do something about it, ultimately, the best solution is to simply build economies, build systems that do not have those inefficiencies in them. And as a result, we can save millions of lives in the first year alone. Ultimately, crypto allows for us to create efficiencies that the current system simply can't achieve.


If an organization or entity has control over your money supply, they control your entire civilization from the government on down. And crypto disrupts that. Crypto allows us to remove the human element of control from our economy and move it into something that is open, transparent and something we call trustless.

Trustless is a really interesting term. Trustless doesn't mean no trust, right? Trustless means that I don't need to trust any of the other human participants in the system to trust the information that's in the system. In our current systems, whether it is the global economy or the internet, you generally can't trust the information that's there as we're learning much to our chagrin. If someone sends you an email, you have no way of really verifying if the information in that email is accurate without going outside of that email itself. In a trustless system, I can trust the information because it's being verified by all the other participants in the system. And that's how distributed ledgers work. I don't have to trust that someone's bitcoin is real, I simply have to trust that the network tells me it's real. And you see, it's not the person sending me the bitcoin I trust, it's the network I trust because it is isn't controlled by any human beings, it's controlled by mathematics. It is a grand game with a very specific set of rules that I can read and understand because of its open source nature. And the outcome of that trust is that I can now do business with anyone in the world without having to verify or check if the money they're sending me in this case is real. It's very difficult to fake a bitcoin. You cannot fool a distributed ledger into pretending you own something you do not.

And ownership rights around distributed ledgers are going to be a big thing. And I think people are going to eventually store ownership rights for everything you own, your home, your car, every little item you purchase... The registration of that item, the ownership will be reflected on a distributed ledger system. And as a result, we'll live in a much more reliable society, a society in which we'll know who owns what and will be able to transfer ownership to people very easily. If I want to give you my house, I won't have to report to a third party or tell other human beings that I'm selling you my house, I simply need to transfer that ownership on the distributed ledger to the other participant. And that level of efficiency, aside from saving you tens of thousands of dollars right off the bat, will allow for a much higher velocity economy.

And that's something that we're going to learn about a little bit today, it's the importance of velocity in an economy. Again, we talked about how inefficiencies are hurtful and an act of violence. Well the opposite of that, efficiency, high velocity is the solution, right? So, we're going to create these high velocity highly efficient economic ecosystems which include not simply money, but everything else we interact with as well.


Double entry bookkeeping was a very important invention. Luca Pacioli, a monk, a mathematician and magician, apparently, living in 1492, came up with this idea of instead of simply keeping one record of a financial record, one sort of track of what transactions you were doing or not doing, is you do two, one that you keep and one that the other participant keeps. And as a result, you have much more reliable accounting records. And once you have reliable accounting records, you could create much more complex systems, including large corporations or large governments. And reasonably expect that the information that are on those ledgers are true and accurate. And subsequently that gives rise to much more effective and much more productive civilization.

As recently as 2008, we invented triple entry bookkeeping. You still do the same two entries that you would normally do, the entry that you keep and the entry that the other participant keeps, but you also do a third one that goes into a global distributed shared ledger that anyone in the system can look at and audit at any time. And as a result, you could create an economic ecosystem in which we can reasonably trust the information that's inside of it. And trust is a really important thing when you're building complex systems. It allows you to move forward and be productive knowing that the unit of account or that the information inside the system is reliable.

And triple entry bookkeeping is going to be the very thing that unpacks the next phase of our civilization as a result. Much in the same way double entry bookkeeping unlocked the productivity of western civilization in the 1400s and on, triple entry bookkeeping will unlock the productivity and potential of human civilization from this point forward.


If I was to ask you how many US dollars exist in the world today, would you be able to answer that question? Probably not. And even if you were to do a lot of research and dig into it, even then you would get generally a vague answer. And here's an even more difficult question: how many are going to exist tomorrow or the day after that or 100 years from now? These are questions that are impossible for anyone in the world to answer today. And as a result, they create a kind of instability, uncertainty in the market as to how many of our unit of account, the very thing we use to transmit value in our economy, exist at any given time. That's a very difficult problem.

And yet, with cryptocurrencies, such as bitcoin, I know exactly how many do exist today. And not only that, I know how many are going to exist tomorrow, and the day after that, all the way up to over 100 years from now. And that level of certainty, that level of assurity, is very valuable in an economy, because uncertainty is sort of the enemy of the economy, it creates doubt. And oftentimes what we call market volatility will result around times of uncertainty, as you learned during most election cycles. However, certainty, the opposite of that, creates a kind of stability that you can build on, something that you could rely on every day. And bitcoin, and other cryptocurrencies such as ethereum, one of the hallmarks, one of the things that is very important to its success, and one of the reasons why it's such a powerful invention, is it creates a level of certainty around its inflation and distribution policy.

You see, not only do you not know how many American dollars or US dollars, or euros or yen, are going to exist today or tomorrow, you also don't know where they're going, you don't know who has them, and you don't know why they will be distributed, those newly created dollars. In the US economy, there's something called the Cantillon effect. That is to say, when new dollars are created, at the moment of their creation, they're actually more valuable than they'll ever be ever again, because the rest of the economy is unaware of their creation. And so, you have a larger impact on the economy as a result. It's the Cantillon effect, it's very important thing to understand.

In the crypto economies, we know exactly where those dollars are going we know exactly where those new units of account are going. Specifically, in most cryptocurrencies, they're going to provide infrastructure into what we call mining. And while mining is very important, and having infrastructure is very important, I'm here to tell you that that's just the prototype phase of the entire industry, that putting all of your new units of account into infrastructure is useful and has created everything that we call crypto today, but the next phase of the industry, what's coming next, will be much more elegant and much more sophisticated in that we'll start to have other considerations as well. Some of the ones that I'm really fond of and really excited about, are the idea that you can have ethos led economies. For example, we as participants in a system can decide that we want 10 percent of all new created units of account to go towards removing all the plastic from the Pacific Gyre, or towards wiping out homelessness in our local communities. These are things that we can choose collectively and sort of point the newly created units at. And that part really excites me. That's some of the promise that's possible.

But the big thing you need to understand now, the big takeaway is, that in our current system we don't know how many units of count are going to exist, and in the new systems we do. And that simple change is going to unlock a tremendous amount of value for all of its participants. In fact, if you go back far enough, this is actually something Benjamin Franklin used to wish for. It's kind of a funny thing, he said, what would be the perfect economy, is if you had a machine that just spit out the exact right amount of units of account every year, and it just kept it at that number of units of account. And subsequently that's what bitcoin did. Bitcoin was the first asset class in the world in which you could predict the future supply of.

That sounds a little bit crazy to most people, I'm sure, but we generally don't know how much gold we will find next year. We have an idea, but we don't know. We generally don't know how much soybeans we will produce next year, or how much oil is going to come out the ground. We can make predictions, but oftentimes our predictions are inaccurate or thrown off by black swan events. With bitcoin that's not true. I know exactly how many exist today and I know exactly how many are gonna exist tomorrow. And that basic premise changes everything. It allows you to build much more reliable economies as a result.

It's almost an unnatural thing, this is something people don't understand, like, bitcoin has a property called immutability. And all real cryptocurrency has the same property in that it will have a set of rules, sort of ideas - like, we have this many units of account, we're going to send this many every day to this group or that group - that is immutable. And as a result of that immutability, we get these really interesting emergent properties, but there's nothing in the natural world that operates that way. We don't have anything that's immutable in our existing economy or in our existing environment. Mostly, what we have is very amorphous and changing, usually changing on the whims of human beings who may or may not have our best interests at heart.

So, distributed systems, such as cryptocurrency, allow us to create a kind of reliability based on this immutability that is almost unnatural. Simply, we've never had anything like it before and we're still exploring what's possible as a result.

Video Details

Duration: 17 minutes and 51 seconds
Year: 2021
Country: United States
Language: English
License: Dotsub - Standard License
Views: 25
Posted by: anatha on Jun 25, 2021

Learn how tools like blockchain and distributed ledgers can rewrite the rules of our economic systems. That’s where crypto comes in.

See our master class series on all you need to know about digital currencies:


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