Cryptocurrencies are programmable wealth

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olli
olli
In everyday English, the words currency and money are interchangeable. Thus, cryptocurrencies often translate in people’s minds as “crypto-money.”
But money is, in fact, just one particular form of currency. The purpose of money is to facilitate trade better than a barter system by moving wealth through space and time: 1 kg of beef in Germany today can be exchanged with a 30 min massage in Japan in a year or two.
Not all currencies are money. School grades, airline-miles, social media followers, hard drive space, and fair trade certificates - while seemingly distinct phenomena - are also currencies. They give access rights to specific wealth creation flows. School grades can be turned into credits that provide access to more advanced courses that form a degree that builds reputation that gives better access to specific jobs.
In this light, cryptocurrencies enable much more than just money. They make previously disconnected access rights (aka currencies) interoperable and programmable.
What does this mean?
Communities with a common interest in value generation can embed their shared values into the currency (token) to incentivize wanted outcomes. For example, a city that wants to reduce its carbon footprint might reward households that invest in local solar generation with tokens that grant free access to low-emission mass-transit. Furthermore, to reduce car use, the city could allow only carless households to sell unused tokens in the open market.
Programmable wealth opens up the entire economic logic for design and experimentation. The exciting but still poorly understood promise of cryptocurrencies is an economy that is much more responsive to what communities genuinely value.For references: Link to Roam
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olli @olliten

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