The technology revolution has opened the door to the digital age, and in this age, digital money will play an undeniable role. Digital currencies are now at the beginning of a millennial journey, and traditional systems are becoming weaker than ever. In the image below, you can see the 10,000-year-old perspective of digital currencies in a simple way:
To better understand the image above, we briefly review the main periods of human social and cultural history.
The age of agriculture
Fifteen thousand years ago, people who hunted and collected plants gradually became acquainted with the cultivation of seeds and decided to replace them with the beginning of agriculture. In this era that lasted until three decades ago, many human initiatives emerged, including the line, accounting, governance, and especially money. For thousands of years, gold was either used as money itself or backed by money issued by governments. The gold standard, or gold-backed money, continued into the industrial age, although it was severely weakened.
The invention of the steam engine in 1712 sparked the Industrial Revolution. The idea of using machine power instead of manpower brought about a dramatic change in production; Agriculture was no longer the main occupation of the people. In the case of money, governments continued to follow the gold standard until the 1970s, with several stages of change, the last of which was the Bretton Woods agreement, but in 1971, then-US President Richard Nixon officially announced the end of the gold standard. A few years later, all governments abandoned the standard. After that, we entered the era of Fiat money or money without backing. Contrary to popular belief today, governments can issue unlimited money without backing.
The rise of computers in the 1980s ushered in the technological revolution. The technological revolution, or more accurately the “digital revolution,” was able to take money into the virtual world using computers and the Internet. Few people today carry a suitcase full of banknotes to the bank to transfer large sums of money. As Yoval Noah Harari writes in his book, “The total world money is about $ 60 trillion. However, the total number of coins and banknotes is less than $ 6 trillion. More than 90% of all the money in the world, more than the $ 50 trillion in our accounts, is on computer servers alone. Similarly, most business transactions are made by transferring electronic data from one computer file to another without any physical cash exchange. “He is just a criminal who, for example, buys a house with a quality full of money!”
The digital age
The world is going digital much faster than we thought. In the digital age, trust, privacy and security are far more important than the analog world. In the case of money, current structures cannot support what has been said in the digital age. Bitcoin was introduced in 2008, shortly after the Great Depression. This monetary system, although only more than a decade old, seems more efficient than Fiat’s decades-old system. Even if bitcoin stops somewhere, the digital age will definitely move forward with money or currencies that are more transparent, more secure, and more private. We seem to be at the beginning of a process that will continue to grow for tens of thousands of years.