Once upon a time we had barter, and it was the next best thing after the invention of sliced bread, but it was bulky, and cumbersome, not to mention the risk of goods being stolen or lost and the inherent need to be on guard and protect your property and goods at all times.
Barter was good for small groups of people and could only support a simple and non-stratified society.
Eventually currency technology made a big leap forward with the invention of price which is a number followed by a symbol either physical or abstract. Numbers are easier to trade and count simply on the tip of your fingers as opposed to making ratios between quantities of different goods or commodities among parties with different interests and appetites.
Of course the numbers or price must be followed by a symbol for the number to be barteable, and back in the day the symbol was a physical coin because it was easier to CARRY and COUNT like fingers hence easy to trade symbolically instead of bartering hard good ratios.
When people had to forge the first coins, they would have liked to make them out of platinum and titanium (rare, shiny, non perishable against the elements), but unfortunately these metals need quite a sophisticate technology to refine the ore and then bring them to melting temperature, not to mention the fact that they are incredibly hard materials so very difficult to forge into coins.
Gold on the other end along with silver and bronze where easy to extract, low melting temperature and soft, hence easy to forge into coins and with it came their popularity as first medium of exchange as an improvement of barter.
A small market with a small quantity of people trading and bartering countable pieces of metal as opposed to physical goods in different ratios eventually caught the attention of nearby groups of people which immediately found this system revolutionary and convenient so they also started adopting this system, and the price (number + token) went viral across different societies and all over the world.
As the currency system increases its penetration within society so does social stratification. We no longer need to be all hunters/gatherers but we can specialize ourselves in different jobs and skillsets and we can optimize and sophisticate our products and services and on the long run we develop and refine technology and stratify society.
Before you know technology progresses and we have paper and pencil. Carrying chests full of gold and silver is not as easy nor practical as opposed to carry countable numbers written on pieces of paper, which are way lighter to carry and can be concealed more easily than coins (hence harder to steal!).
Of course, we still have the problem that paper money can be taken and stolen like coins, and before long we have numbers traded within hard drives by means of pieces of plastic (credit cards) throughout an interconnected IT system.
This Internet form of money is adopted more and more because of its convenience as opposed to paper or gold money. It is safer, easier and lighter to carry around as opposed to more primitive forms of currencies hence it is widely adopted out of convenience.
Different currencies for different purposes
Not all currencies are created equal or are used in the same way across different groups of people.
Imagine you are a drug or arm dealer or a simple Joe looking for adventures… You need to be able to make deals and move currency around, but you don’t necessarily want your transaction to be noticeable or logged with your real name or surname on it, not even an alias.
Ideally one currency should allow some degree of privacy or anonymity as there will always be a certain ratio of economy wishing to stay under the radar.
Imagine then you are a saver and want to stash some cash for your retirement and you don’t want to expose your savings to inflation. Then you would like to have some form of gold in your hand (fixed quantity) so that your savings don’t get diluted over time.
Then there are the everyday transactions based on standard fiat currency which are quick and convenient if it wasn’t for the fact that the currency base MUST expand depending on how much the economy grows each year, thus underlying inflation and the need to keep money and economic activity moving at all time to stay on top of the inflation curve.
There are only ten kind of people in the world: those who understand the binary numbering system and those who don’t!
The need to expand cash is not well understood by many and some suggest our currency base should be based on a fixed mass of valuable metal and this would be far more convenient than having a currency base changing at the whim of central bankers.
Now imagine the Earthlings all of a sudden adopt a worldwide currency system based on Gold whose quantity is limited, then if you go to a Starbucks and order a Latte it would cost you 0.0000 MANY-MANY-ZEROES-IN-BETWEEN-THEN-A-NUMBER-AND-SOME-OTHER-NUMBER grams of Gold because the number of goods and services worldwide gets bigger and bigger every year, but the total currency base is stuck with the total gold mass available on Earth, then deflation grows rampant as economy grows as the numbers of zeroes past the comma mark on your bill.
As a consequence of this, instead of counting the grocery bill as sum of nearly-entire numbers (30 bucks, 40 quids, 52 Euros, etc) we will have to start doing the math on the bill in terms of negative values of logarithms in base 10 (ie 3.0E-11, 40E-12, 5.2E-10, which is painful enough even for a math professor, never mind the average guy.
A currency to be useful in everyday transaction must be countable in the sense that the peasants must be able to quickly make sums and subtractions in a transaction, not losing their hair because there are too many zeroes (one side or the other of the comma mark).
For a currency to be useful the average grocery bill or transaction must be within the mathematical capability of the average person.
Also another important fact of a currency is the transactability, in the sense that measuring out and transferring across nanograms of gold is a lot more challenging in many ways as opposed to trading out numbers on pieces of paper (or numbers on screen of computers), so again the paper or fiat currency wins the day in terms of practicality, speed, simplicity.
Last point against Gold as currency is the fact that it can be physically stolen, whilst stealing straight from a bank account is much more complex feat as long as the underlying currency software is whole and hack proof.
An interesting point in this regard is that also most of these who claim to HAVE gold nowadays in their investment portfolio, in fact they only own pieces of paper or digital files claiming they are owed a certain amount of physical gold if ever they want to claim it and have it delivered at their house.
But even then no one wants his/her gold to be delivered at his/her house because it is costly to have it delivered and then it is very risky to store it within your premises unless you live in a fortress, so again these so called gold owners only own and trade pieces of paper rather than real physical gold, then again paper or better say digital information wins the day as opposed to physical goods or metals.
In a certain sense OWNING physical gold is a bit like having a horse “parked” next to your car as a backup because horseback was the most convenient way to travel for many centuries before other more practical means were available such as bike/car/bus/airplane/rocket/teletrasportation/etc.
Of course if you are planning to use Gold in its paper form to stabilize a financial portfolio then it can serve its purpose, but only among other financially educated people who can afford this sophistication and spare some of their excess of wealth, not certainly for everyday transactions, nor it can be used as a safety belt in case of societal collapse.
A society collapses financially when the people belonging to that society no longer keep their bums on their seats as they no longer believe the currency system has a value. Then the societal stratification supported by the currency also collapses, meaning the society scales back to more scattered and smaller hunters/gatherers type groups and all the complex skills to support complicate systems and technology is forgotten or superseded by everyday basic needs such as food/water/shelter/survival.
IT and Internet are the structures with more sophistication and harder to maintain so these will be the ones to collapse first. After that more basic and life supporting ones will fail such as electricity, running water and lastly farming.
Thankfully the humans are hardwired for stratification as this is the most efficient means to ensure genetic survival of the specie so a currency will arise once again along with stratification, first locally and then globally.
Back to the future of currency
If by chance we happen to go back to the future and take a look at the currency system of mankind we will observe the following:
The currency system will be almost completely digital and based on block chain technology, not just for economic transaction but also for personal identity, company accounts, property ownerships, medical records, public statements, Wikipedia based body of knowledge, etc, whilst only a small amount of transactions will be based on hard cold cash type of money.
The system is highly transparent and the transaction costs are null however not all the financial details of all the people in the system are open to everybody and there are superuser privileges for States and Courts to be able to access delicate private information or have the power to undo transactions if claims are made against frauds one way or the other.
The system is largely unmanned and there are virtually no financial operators, however there still is a certain central control whose job is to fine tune some mathematical parameters of the system (such as the generation or deletion of new monetary base and where this should be injected into or deleted from).
Transactions are mostly encrypted and therefore anonymous but a number of people can obtain superuser privileges and force individual and companies to disclose their portfolio or transaction records within the framework of criminal investigations.
Likewise doctors can access our entire blockchain medical record, our financial advisor can be allowed to access our blockchain file and program payments and transactions for us within certain user privileges we decide to grant.
It is usually bad policy to leave public your financial records (although possible within the blockchain software). If you think otherwise then ask those who won the lottery and then had lechers (or blackmailers) trying to extort them money every day.
The blockchain file itself is stored in four separate and independent locations and accessible for remote scans or can be partially or completely downloaded by anybody and stored locally into hot wallets which are ultimately a needless local backup of your financial information.
The real usefulness of the blockchain file is not about keeping track of private property ownership and transactions (what is owned by who) but it is its invaluable statistical datamining potential.
Anybody can track (always within anonymity limits) the inflows or outflows of economic or social activities between different regions, parties, different layers of society and it is an incredibly useful tool for planning and forecasting world society needs.
Also, from a medical perspective you can track the average life health development (or lack of thereof) within different population groups, ages, regions, etc so to better plan medical interventions and policies.
You can track in real time the spread of average morbidity rate within a population and readily implement lifesaving policies or you can also call out the outlier and demonstrate easily the lack of need for any intervention.
Currency mining as intended today (2020) is a useless waste of energy. The purpose of this barbarous process in the first digital currencies was to incentive people to keep their computer ON with blockchain based software online in order to make sure the currency network was always available to process new transactions. Once the Blockchain Currency Network (BCN) becomes the norm for most of the transactions then there is no need to have multiple distributed backups of the network and the blockchain files need only to have few permanent and safe backups in place and no more.
A three layers crypto currency system
The first and top layer of the currency system is what people here and now would call a Gold-coin (GLC) available to personal accounts only, no business accounts allowed.
It is of course a digital abstraction and there is no physical gold behind it, however the monetary base of this is somewhat fixed: There are only so many gold coins as the number of people living on the planet.
The way it works is that when you are born you are automatically registered as an individual by a certified officer, in that moment a goldcoin is generated within the blockchain under your name.
It is a bit like being born and to have already a winning lottery ticket in your hand.
Of course you are not allowed to use that money until you are of age and even then it can be employed to pay for higher education and schooling, or for setting up your own company, or for buying a house, or as a retirement fund, etc.
When a person dies (or his/her death is registered into the system) then a goldcoin is subtracted from his or her goldcoin account or if there is no goldcoin to subtract then a goldcoin is subtracted from all the other goldcoin accounts proportionally, except for the accounts with less than a goldcoin in their balance.
This goldcoin based system is meant to stabilize society against inflation.
Why then can we not operate our everyday transactions in Gold-coins to stay away from inflation risks of the other layers of the cryptocurrency system?
Answer: because a goldcoin-to-goldcoin transactions take 90 days to be completed and is therefore not suitable for paying bills unless they are very high value and the transaction can wait a looooong time to be confirmed, as it could be recalled at any moment by the sender during the waiting time.
These 90 days waiting time are not because of software speed limitations, the transaction could happen in matter of nanoseconds but it is a currency software setting to ensure goldcoin is used as a long term value storage for saving purposes and to dissuade speculators and day traders from tampering and abusing the system.
Also note, goldcoin wallets are for personal entities only (no companies), we will see why this is later on.
Just underneath the Gold-coin there is the Silver-coin or SLC.
The monetary base of the silver-coin expands (or rarely contracts) depending on how economy fares, so mostly new amounts of silver-coin currency is generated and injected into people account to ensure the grocery bills stay within countable limits.
The quantity of new currency generation and how these new numbers are injected into people accounts is subject mostly to unmanned algorithmic analysis depending on region population density, industrial capacity, etc and to many contemporaries it might resemble a Robin Hood sort of algorithm. This algorithm basically multiplies the currency base as needed to keep up with economic and inflation goals, however certain accounts (mostly lower wager ones) gets multiplied more than richer ones, so the convenience of stay within silvercoin accounts for most of the population.
The advantage of the Silver coin is its immediacy in everyday transactions and the possibility to have the logs of each transaction available for statistical analysis within the blockchain files as also goldcoin transactions do.
It is possible to trade silvercoins for goldcoins or the other way around, the exchange rate between the two currencies is the simple ratio between the goldcoin monetary base (almost-fixed) and silvercoin monetary base (variable over time depending on economic flows).
No operators or middlemen are needed for these transactions, hence no costs for the currency user, hence more convenient for all the society, less waste of lives and productivity to make the currency machine work.
The issue in these kinds of inter currency GOLD – SILVER transactions is mostly matching offer and demand as there could be a limited number of buyers or sellers one way or the other of the transaction, then your request for transaction would be put in a non-transferable FIFO queue.
If someone claims to be victim of a fraud or invalid transactions, then it is possible to freeze the amount under question on the receiver until the issue is resolved privately first or in a court until said amount is refunded or the transaction confirmed as legitimate less some costs for the legalities to be paid by the party found at fault.
Third level of currency is the so-called Bronzecoin or BRC and it serves that part of economy who wishes to stay below the radar for one reason or another.
It is blockchain based and again and it is pegged 1 for 1 against silvercoin by simply deleting some ledger information relative to ownership and account number to the silvercoin line, so it no longer bears the name and surname of the original owner account and bronzecoins can be traded onto other bronze accounts with no owner names.
The temptation is then for thieves to kidnap wealthy silvercoin owners and force them to change their money into bronzecoins which are easy to trade anonymously.
Only issue here is that it takes 90 days (currency software setting) for silvercoins to be turned into bronzecoins, so it is a lengthy process and this transaction can be recalled at any time during the transaction waiting time and it can be put on hold if related accounts or parent accounts make claims or flag suspicious activity within said account.
The transaction from bronzecoin to silvercoin is immediate and the system therefore favors a transparent form of economy as opposed to the hidden one.
On the other end the system must guarantee the anonymity of bronzecoin transactions, or else alternative currency systems and exchanges will spontaneously develop to satisfy these black-market needs.
Once you start having unregulated and anonymous alt-coin exchanges you will for sure have hacks and all sorts of financial troubles as opposed to guaranteeing a safe space for this kind of transactions within the main blockchain currency software (BCS).
Cashcoin is the last layer of currency. It is traded 1 to 1 to bronzecoin and silvercoin, it is physical paper based currency and it requires the maintenance of ATM machines and currency printing infrastructures.
It is slowly falling out of grace and popularity given the higher convenience of bronzecoin transactions which are also anonymous, but it serves the purpose of guaranteeing the ultimate peace of mind for anonymous transactions.
A delicate subject which only a small number of scholars and space travelers have had the opportunity to investigate and report back.
The currency system described above is the final evolution of historical and technological forces at play for centuries within mankind.
Other alien worlds and societies across the galaxy also have their own kind of currency, and despite the differences in count base (we humans like to count in base 10 for obvious reasons), most currency systems eventually converge to the one described above or something close to that.
More to the point, it is not possible for a society to develop ultra-luminar space travel technology unless the society is stratified enough to be able to produce and maintain technological advancements, and it is not possible for a society to stratify itself properly and efficiently for sufficiently long periods of time unless the currency system who serves this society is also efficient and rid of needless resistances and speculative loops.
Once a society reaches the space exploration maturity and joins the galactic community of societies and species then new cultural and commercial exchanges ensue, and with it the need to have an intermediate currency system (ie a galactic currency system) to mediate between different worlds at different stage of economic and technological development.
The galactic currency system is then set up as an intermediate medium of exchange between different worlds and species in such a way to protect the newly arrived and smaller economies and ensure a fair integration of these within the galactic economy and society of societies.
Who owns the currency
The currency system itself belongs to mankind, it is a fundamental technological infrastructure such as English language (simplicity!), technological knowledge, motorways, airports, farms, schools and hospitals.
The software itself can be programmed to inject money into public servant accounts or for disaster relief program in an automatic and unmanned way.
It can also be programed to withdraw money from very wealthy accounts as needed in order to support the organic shape of the wealth distribution curve and avoid monopolies and concentration of power which could lead to malinvestment and hamper innovation as we have seen when central banks decide to go into a runaway printing spree to prop the markets thus destroying the innovation and productive potential of entire economies.
You would call this currency destruction a tax but taxes are no longer needed in this system since money can be generated to finance any infrastructural project or subsystem (schooling, healthcare, etc) deemed essential without having to close the loop with taxes.
Destroying or deleting currency from mega corporation accounts is done as a mean to spur corporation spending through innovation or by direct redistribution of the capital among employees.
The decisions about how to fine tune these algorithms is made by the parliaments, but all this to say that central bankers will disappear in the future and be replaced by programmers sociologists and data scientists doing the tweaking of the BCS (Blockchain Currency Software).
Who needs central banks?
Imagine then that you go to the board of a central bank and tell these wealthy and powerful people that their services are no longer needed, as a new more efficient system is now available and they are relieved of their duty and are free to go and feed pigeons at the park starting effective tomorrow!
Well rest assured these people will do whatever it takes to maintain their privileged position and cling to their boardroom chairs for as long as they can and maintain their privileged position, even though this means mankind is stuck with horses and carriages as opposed to moving into mechanized transportation systems so to speak.
Just a small footnote on this subject, current state of technology does not allow for a safe development of a world crypto currency system since quantum cryptography must be developed first before the BCS is developed and safely deployed. This is not a major hurdle at this point, just something to be aware to make sure the earlier version to BCS is set up to handle the advent of this new technology.