The other night I was having dinner with my family, just the usual, and if you know how Italian minds work, you should understand that dinner with the family is actually a very important moment (not to sound too much like Don Corleone, but it’s true). In my case, we often tend to engage in very serious conversation after dinner and topics can range from ethics, to politics, and to the economy as well.
I have never actually been all that interested in the economy until I launched my own startup. It was only then that I started educating myself and discovered a whole new world to it: cryptocurrencies. You’d think that it’s about time that I did, and yes, I say that to myself too.
So, as I was saying, at that very much Italian dinner, I was trying to explain to my mother how cryptocurrencies work.
If we think about money and the economy, we always think about it as something physical, tangible, something we can actually hold in our hands. It’s funny how we have this image of Uncle Scrooge diving into a pool of gold coins, and this, for us, is the apotheosis of money. When 80% of the population (maybe even more) think about money, like I said before, they think of something material, and often cryptocurrencies are still being written off as something malignant, something we should all stay away from. All because it’s not tangible.
So here I was, having my Italian dinner with my Italian family, asking them a simple question: can you actually touch the money you have in your bank account?
Obviously, the answer was no. Most of the time, they are mere numbers on a piece of paper or on your screen. So my next question to them was, “how is that any different from owning Bitcoin or other similar cryptocurrencies?”. I believe that this disconnect is one of the main causes of distrust towards cryptocurrency.
If we really do stop and think a little more deeply about it, the answer to my last question is “there is no difference”. We can’t actually touch the money we have in our bank accounts because there is no physical money. We imagine these big vaults, filled with gold coins just like Uncle Scrooge’, and while that may have been true just a decade ago, in the 21st century, all those gold ingots have turned into numbers.
So how are these numbers that define the values of the US dollar and Euro any different from the ones that define Bitcoin, Ethereum, and so many other cryptocurrencies? Wouldn’t you say that they’re pretty much the same?
If we had a time machine and we were able to travel back to the 18th century or even further, and if we were to bring a person to the future and make him or her see how our banks are working now, they would be extremely shocked by the fact that there is nothing tangible.
Since the beginning of time, humanity has always lived on economy and some sort of money. First there was bartering, the most tangible currency. We knew that a cow was worth 3 sheeps and 2 chickens, so this is how transactions were made long time ago. Then our necessities evolved, so in 600BC the first currency was actually invented by King Alyattes in what today we call Turkey. This created a roar that is still aching today. Coins became cash, cash became credit cards and in 1946, when the first credit card was invented, it was the first moment when the actual money started not being tangible anymore. With just a swipe, we were able to pay sums that we weren’t actually physically owning anywhere.
We are no longer just reasoning on silver and gold, we no longer have ingots in our banks and this might sound like the weirdest thing for someone from 1740. And I can bet, that if we take the same time machine and we jump 100 years in the future, we would maybe be surprised to see that every transaction needs to be done not in USD, not in Euro but in cryptocurrency. Truth be told, we already are in the midst of entering that future.
The future is scary. It’s not easy to just jump into the unknown, not without fear. Once upon a time there was Star Trek and they had phones in their hands, something that was completely unthinkable for us in the 80s… and then Steve Jobs invented the iPhone. The rest, as we say, is history.
About The Author
Europe Executive
Erika
I’ve just turned 32, and my name is Erika, with a ‘K’. I’ve always loved communication, both in its digital and traditional forms. Everyday relationships, work partnerships, and even simply contacting someone else, all of this is communication.