When I first heard of bitcoin I thought “hmmmmmm…. ok …. another digital payment system like PayPal or my bank’s website”. It only took a few minutes of research into blockchain for my head to literally explode.
I realized right away that cryptocurrency was a concept and a technology so completely novel and innovative that, to me at least, it had previously been an unknown unknown - something that not only didn’t exist before but something that most people probably didn’t know didn’t exist or didn’t even know could ever exist.
Math & Computers & Chicken Mcnuggets
Unfortunately, most mainstream media accounts of cryptocurrency are stuck in that early pre-conceptual phase, as comedian John Oliver’s take on cryptocurrency indicates -
everything you don’t understand about math combined with everything you don’t understand about computers
It’s a funny line but the focus on math and computers elides the unique value of cryptocurrency.
In a half-hour segment, Oliver delivered an entertaining and laudable description of the crypto milieu, including parodies of Bitconnect, bizarre coin names (“deep onion”), and EOS's $1 billion-plus valuation as an example of the irrationally exuberant ICO craze.
It took Facebook seven years to raise a billion dollars from investors, it took Uber five years – EOS surpassed that in around nine months – and that is despite the fact that the Wall Street Journal described Block One as ‘a software startup that doesn’t plan to sell any software'.
Currency? Cash? Commodity? Security? Property?
It comes as no surprise that Oliver’s and most media accounts fall short at the “what” stage, since it seems nearly impossible to reach a consensus on precisely what cryptocurrencies are.
They’re called “currencies", and some of them at least, can be spent. Satoshi’s original whitepaper called bitcoin peer-to-peer "cash", and he went on to say "we define an electronic coin as a chain of digital signatures". Even some of the smartest economic minds out there can’t seem to nail down a definition. Right now - and this could change tomorrow - the CFTC calls them commodities, the SEC calls them securities, and the IRS calls them property. So take your pick. Oliver lets a dude in a bitcoin suit tell us what's up.
Oliver’s sendup runs off the rails when he falls back on that most hackneyed of all tropes - Beanie Babies. The subtext is unmistakable - crypto is a manic craze, a passing fad with no intrinsic value.
Media descriptions could perhaps benefit from a bit more research to arrive at that head-exploding moment I hit with the realization of just exactly what it is about cryptocurrency that makes it something completely novel and thus hard to define because most people never thought it was even possible.
Irrefutable Digital Ownership
That completely novel concept is digital ownership - or more precisely - an internally verifiable irrefutable chain of digital ownership.
Ownership is the fundamental building block of economies. We need to be able to prove we own property, homes, cars, money, and the assets of a business. We also need to be able to prove we own intangible assets like songs and stories and ideas.
Truth In Math
All of these types of ownership require multiple third, fourth, fifth and even more parties to create and enforce laws, store assets, print and guarantee money, enforce contracts, litigate disputes, run and regulate banks etc. Blockchain can eliminate all those third parties and bureaucracy with cryptographic math as the ultimate keeper of truth and establish an irrefutable and internally verifiable chain of digital ownership.
What is needed is an electronic payment system based on cryptographic proof instead of trust.
- Satoshi Nakamoto
It's The Future ... Bro
All the other benefits of blockchain notwithstanding, it would be ludicrous to compare a Beanie Baby with something that is fungible, portable, durable, verifiable, infinitely divisible, and decentralized - but that’s exactly what every cryptocurrency is.
The ultimate irony is that the most prescient segment of Oliver’s rant was the one clearly meant to be the most comical - when he used footage of a guy in a bitcoin costume answering the eternal question - what is bitcoin? with “it’s the future, bro”. The dude in the ridiculous getup is 100 percent on the money - digital ownership IS the future…. Bro.
Images via Shutterstock, Youtube, HBO's Last Week Tonight