Friday, November 10, 2023

Homo Sapiens: Innovations in Money

What made humans create money? 

Homo sapiens are adept at inventing imaginary concepts like money, superbeings, and belief systems, fostering unparalleled collaboration. Monkeys can collaborate only in fingerful numbers, but humans, with their imaginary creations, can collaborate in planetful numbers.

Humans invented belief systems, allowing large groups to share a common set of morals and beliefs, enhancing great human collaboration.

Money, his next imaginary system, transcends various belief systems, cultures, and religions, connecting all humans. Sapiens turned paper into an 'I owe you' dollar note. On a dollar bill, you'll find 'Federal Reserve Note' and 'This note is legal tender for all debts, public and private'. For monkeys, a coconut for a banana makes sense; paper does not. But humans use special paper as money to sell a banana and buy pepper with the same paper in a shop. As long as everyone agrees and honors the paper, it makes sense as money in human imagination. Before paper, there were barter system, commodity money, and metal money.

Bitcoin is a modern invention akin to 'unbreakable money,' a transition from physical to digital currency, akin to shifting from ritual to virtual/spiritual reality. More powerful than any government note, Bitcoin is virtual, with no physical form like the concept of Brahman in Hindu philosophy - neither form nor formless. Just as Brahman eludes definition, Bitcoin defies the conventional understanding of what currency should be – an ethereal presence, both everywhere and nowhere at once.

Unlike centralized government-issued paper currency, Bitcoin is decentralized, beyond any single government's control. If governments try to challenge it, draws strength, becoming more robust against these attacks (like the character Vali in the Ramayana, who gains half of his opponent strength). In the face of opposition, Bitcoin, too, adapts, like Mahishi taking many copies of herself to storm the Svargaloka/celestial world/heaven in Ayyappan mythological story.

Though invisible, Bitcoin's transactions are invincible, due to 'proof of work.'

Bitcoin encompasses thousands of years of monetary history, blockchain technology, cryptography, decentralization, Proof of Work (PoW), digital scarcity, trust in technology, investment psychology, supply and demand, inflation, monetary policy, open-source development, communication network, network consensus, game theory, philosophy, energy, software, legal frameworks, and financial innovation.

Governments might be compelled to embrace or replicate Bitcoin's methodology. It's nearly impossible to counterfeit, and its high divisibility allows for micro-transactions. It's accessible to the unbanked population, offering transparency and the ability for public auditing, reducing fraud and corruption. It also supports smart contracts within its ecosystem. You can send the money to remote parts in a remote continent who doesn't even have bank account. It is too difficult to accomplish with a fiat currency.

Bitcoin, limited to 21 million coins, creates 'digital gold,' an evolution of the gold standard used by civilizations like the Varna, Sumerians, Minoans, Greeks, Romans, and Egyptians, who valued gold for its rarity and used it extensively.

Bitcoin transactions are pseudonymous, conducted using public addresses (a string of alphanumeric characters) rather than personal information like names or physical addresses. Every Bitcoin transaction is recorded on a public ledger and the transactions are linked to Bitcoin addresses, not directly to personal identities. Bitcoin transactions are traceable and permanently recorded on the blockchain without a identify disclosure. The system relies on cryptographic principles to secure transactions. With additional tools, users can further obfuscate the link between Bitcoin transactions and their real-world identities.

Bitcoin's immutability ensures the integrity of every transaction, offering zero-cost transactions even for large amounts, like a $2 billion transfer in August 2023.

El Salvador's decision to adopt Bitcoin aims to assist its 70% unbanked population and manage remittances, which comprise over 20% of its GDP, a path also followed by the Central African Republic.

Every individual on our planet has the potential to explore the wealth trillions of stars and planets in the universe. Learn how to swim and sail safely in the ocean of wealth/money. You cannot drink all the ocean of wealth but enjoy your shared journey in the ocean of wealth. 


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