Trust Is The Only Currency That Matters
Michael J. Aumock
19 Dec 2017
TRUST is the only currency that matters.
I know that sounds silly, especially in a time where new types of “currency” seem to be magically appearing out of thin air, daily and by the dozens.
But ask yourself “why”?
Why can Bitcoin and other crypto-currencies continue to rise?
If you stop and think about it, the entire commerce system is based on one thing…
Trust.
Entity A trusts that entity B will deliver what they claim to be true and known and entity B trusts that entity A’s consideration (payment) is everything that A said it should be.
For example, if I am buying a new Ford Mustang, I trust that the dealer didn’t take out the airbags (I can’t see them, after all), and likewise the dealer trusts that I didn’t give her counterfeit $100 bills as payment.
The Blockchain, once you understand it is iron clad, 100% trustworthy. It’s bulletproof, hack-proof, change-proof, and waterproof.
That’s part of its magic.
But… it is also a huge gaping hole in the known financial universe for many of you reading this now.
So, if so many people don’t understand or trust the Blockchain, how can BTC be making an historic (and make no mistake, it already IS historic) run?
Quite simply, the early adopters have trusted the system for more than seven years, and it’s proven itself to them. They have brought their friends and families into the fold and now, there has been a tipping point (the first of several, regarding crypto currency, I predict).
When the “Mom’s basement/Hot Pocket/Mountain Dew/Hacker Guy” tried to explain this to you five years ago, it was too far from reality. It was easier to just cash your paycheck, pay your rent, fill your tank and go about your life.
Nobody else was talking about it. Because it wasn’t on your radar, you didn’t trust it.
But, behind the scenes, off your radar, a revolution was building.
Slowly.
Steadily.
Geekily.
And most importantly, transparently.
The beauty of the Blockchain is its simplicity as a format, and it’s complexity as a solution.
Every transaction that takes place is verified by tens of thousands of special nerd-ninja-math-assault-teams, competing to solve the mathematical equation that represents that transaction AND its place in the Blockchain. So that every solved equation creates another link in the chain BUT INCLUDES every link that came before it. This is referred to as “Proof of work”, and it is seen and understood to be immutable, unchangeable and essentially perfect in the eyes and computers of the millions of people around the world who use their computers to solve these equations and, by default, create the Blockchain.
These are the Bitcoin miners.
The early adopters understood this, and while the early equations were much simpler than the ones in play now, the formula is just as immutable.
Why do you care?
Because the people who already understand the Blockchain and trust the technology have created a market for a new method of holding and trading currency that doesn’t involve a central location (government).
The technology can’t make a difference on its own… it is nothing more than coding… millions of lines of ones and zeros.
But once Bitcoin hit terminal velocity and as such, reached a tipping point in September of 2017, an upward spiral began to happen.
Jamie Dimon came out and denounced Bitcoin as a “fraud”.
All banker jokes aside I think that was a naïve thing for the legendary CEO to say…unless it wasn’t.
It was HIS comments that really gave Bitcoin some momentum this past September, which became almost a perpetual motion circle of rising value for Bitcoin holders… every time Google searches for Bitcoin increased, Bitcoin PRICES increased. So just by being mentioned by Dimon, the market spiked a little. Then someone reported that the market spiked, and people Googled it to see why, then it spiked again, and we got into the reverse death spiral as people started to buy (Largely based on FOMO) without truly understanding the reason why it was going up, how the Blockchain works or what do with a Bitcoin now that they have it.
But it felt GOOD!
None of this +.045% increase in a trading session like you might see with stocks or bonds…… BTC was FLYING up “the hockey stick” and all anyone had to do was remember where they put their Private Key so they could sell their Bitcoin someday… and they were becoming wealthier by the HOUR.
But most of the people coming in now are buying on speculation.
That’s not trust. Or not much, anyway… they trust that it’s a volatile currency that is largely on its way up.
They trust that when they want to sell it, there will be a way to do so.
They trust that their privacy is guaranteed and that the transaction will be secure.
They also trust whoever talked them through setting up their “wallet” and helped them buy their first “coin”.
Now… nobody knows what’s going to happen to Bitcoin.
I know governments hate not being able to control it, and that will have some blowback. I expect this will affect people in certain countries more than others.
I know some people will have more presents under their tree this year because of it.
I know millions of people will begin their relationship with the Blockchain in the coming months because they wanted to buy some Bitcoin. And as they begin to understand how it works and why their crypto-currency is safe then it will move to the mainstream of life.
THAT is the important thing.
So, it doesn’t matter whether Bitcoin goes to $10 million or back to 20 bucks.
What matters is that millions of people now are familiar with it, and millions more will have confidence in it as a trustworthy piece of their daily technology.
And …
-When it can be used to allow people to conduct digital transactions in countries where most people don’t HAVE a bank account and can’t get one.
-When it can be used to trace ownership of land and replace title insurance in places where as many as 35% of landowners are sitting on illegal or misrepresented deeds.
-When it can be used as a means to “escrow” funds for everything from a child’s allowance to construction loans or release of public funds to NGOs…
Then people will understand and trust it.
And when they compare the Blockchain to their governments and what they represent, it might just be that people the world over have more confidence in the Blockchain than the sovereign currencies they grew up with.
Not that hard to imagine all of a sudden, eh?
