I am intrigued. What if all the nation states were to come together and agree on adopting a single currency that could be used all over the world?
What would it look like? Who would own it? How could it be used?
I’ve been thinking about this for a while.
Since 2009 a revolution in finance has been bubbling away in the background only to explode in 2017. Not that the concept was anything new. Way back in 1989 David Chaum is said to be one of the first with the concept of having a digital currency and called it Digicash.
DigiCash transactions were unique in that they were anonymous due to a number of cryptographic protocols. Despite having potential the issue was in gaining widespread ‘buy-in’ and DigiCash declared bankruptcy in 1998.
Back to 2009 and a brand new digital currency created with good intent gets ridiculed and is accused of being a tool for dealing on the dark web, funding all sorts of nefarious activities.
Over the years Bitcoin starts to spark peoples’ imaginations and gains in popularity. Several ‘altcoins’ appear with different takes on Bitcoin, but all professing to use blockchain as a core technology.
Fast forward to 2018 and things are getting serious. Bitcoin is slow. Bitcoin is expensive and has lost half of it’s value since the high just before Christmas. Now there are plenty of ‘me too’ coins and I count over 1,500 crypto currencies with a combined market cap of half a trillion dollars. Whilst significant to the man in the street and the relatively small but growing number of crypto investors this is still only a very small fraction of all the money in the world today. According to the CIA World Factbook the total figure for ‘broad money’ is estimated to be over $80 trillion.
Despite the relatively small slice of the pie taken up by cryptos the once scathing banks are now starting to sit up and are now taking notice. Scanning through the headlines I see ‘5 banks are in trial runs with Ripples’ Blockchain technology’. Could it be that Jamie Dimon, despite his multi-million dollar salary got it wrong? Even Western Union are finally seeing the light and the threat from crypto currencies potentially undermining from their highly profitable remittance market and are also trialing the Ripple technology.
Why Ripple you ask and not Litecoin, Stellar or Nano? Well it would appear that the Ripple network will be controlled by the banks and is centralised rather than decentralised as is the case with most other crypto currencies.
Back to a single currency. What do we know?
The pioneering Bitcoin is still slow and expensive so the vast majority of people are not using Bitcoin as a currency only a store of value. In reality with the exception of a few users in countries where hyperinflation exists and others who reckon their activities go unchecked by using Bitcoin, everyone else is just waiting for it to hit $50,000. Anyone else who is serious about using it as Satoshi Nakamoto intended in 2008 is waiting for transaction times and costs to decrease. It is hoped that with more lightning network adoption it will become more usable in an everyday sense. The key question is will it be faster than Dash, Stellar, NEO, Raiblocks..etc? How will security be affected by increasing speed and what about the cost of transactions?
So what is important for our world crypto currency?I have broken this down into 7 pillars that I think are essential for this to work right.
- Accessibility and usability
- Integration with other Fiat and related/existing currencies/payment rails.
- Speed of transaction
- Cost of transaction
- Fungibility/ Flexibility – ease of conversion
I will elaborate more on these in a subsequent post, outlining which of the currently available currencies (fiat and crypto) do these best. I welcome any missing ‘currency characteristics’ you feel could be added to the 7 pillars, so please feel free to comment below. Until next time.