It’s not a ‘street sign’ anymore… Well sure, you can still find them – signs on the street – but Wallstreet isn’t the same Wallstreet as it was before, and they’ve been missing the signs for a long, long time now… Crypto-currencies, blockchain, distributed ledgers, digital contracts… it’s all a new landscape and nobody on Wallstreet was ready for it.
Whois In Charge
Who is taking the lead? Who has control? It isn’t the traders on the floor or the executives in their lofty offices, nor is it the politicians or the governments. And, although this might be disputed, it isn’t even the programmers, the mathematicians, or the hackers (good, bad, or otherwise).
Slaves to the Algorithm
People fear that control is in the algorithms – the masses of servers, processors, and coin mining computers, churning away like cogs in a massive machine – one that’s poised to overrun a centuries-old system. But in reality, crypto currencies are simply replaying a history which has been with us for at least two millennia.
What is Money?
People have traded many ‘things’ as currency, for as long as anyone can recall. It hasn’t just been gold – in fact, for most of history it wasn’t gold at all. At times “currency” has been in the form of things such as sea shells, dried corn or beans, tulip bulbs, animal skins, and yes, coins of varying types of metals, and paper notes. Most of these objects of currency had intrinsic value; though often the coins and certainly the paper had none. At first, global currencies were based on the value of the commodities in use, then eventually shifted to being somewhat representative of value (though not completely tied to the value of the commodities), and eventually became completely intrinsic (having no actual value other than a governmental decree; widely known as a “fiat” currency).
Currency in the United States
For a long time, coins were a commodity currency, and therefore were backed by physical and tangible value of gold or silver. If you had a lump of gold or silver, you could take them and have them minted into fully legal tender. But the values of each respective metal fluctuated sharply with supply and demand, and at different rates. When gold outpaced silver by an increasing magnitude of value, silver was shifted to a representative currency, essentially ending the bimetallic system. Ultimately, the US shifted to a ‘gold standard’ where the dollar was tied to the value of gold (though it ceased being a true commodity currency, instead becoming a representative form).
Not All Fiats Are Cars
In the early 1970’s, the US shifted to a totally fiat currency standard, decoupling the dollar from being tied with any commodity or representative currency. This was not unprecedented – it had been done previously at least as early as in the first millennium in China – and throughout much of the 1900’s it spread until it became the global standard for currency. So, like it or not, in many ways crypto currency is nothing new at all; the same thing has been done in various ways since 1000 AD.
What Has Changed is Who Has Control
Previously, currencies have been controlled by the ruling class – kings and queens… emperors… presidents… chancellors… governments. Whether people were living in a democracy, a kingdom, or a communist regime, the governing leaders had control over the actual value of their currency. …Granted, they might not have always known that they did or have had much ability to actually do anything with the values; they were the ones who controlled it. This is what has changed with the new financial paradigm.
Do They Know?
Whether it is a crypto currency, a token, or a link on a blockchains living on a million servers, it is out of the hands of the “ruling” class, and in the hands of the people. Whether or not they know that they have the control of it, the people – for the first time in history – have control over what happens with these new fiat currencies.
This is the X-factor of the new financial world. This is what will transform Wallstreet into Wallstreet X, and will increasingly make ‘zeros’ and ‘ones’ transferrable into physical gold, tulips, or a couple of pizzas. And while there always is the possibility of change, wild fluctuations, and uncontrolled gains (and loss) – as there is with any currency – it is the people who are decreeing the value of this fiat currency. It is the people who are the now-omnipresent traders on the new Wallstreet. It is the people who are the ‘executives’ looking down from their powerful towers, peering into computer screens, watching the world change as Wallstreet X plays out in front of their eyes.
Reigns and Reins
While the people take the reins from the rulers and the rules of this world, it has not gone unnoticed. Power never changes hangs without a struggle – yes, even in America (consider the run-up to any election, if you disagree). The rulers, executives, and traders all want to regain the control they perceive they held before. They will fight back… Whether they can beat the odds on Wallstreet X remains to be seen… but the weapons they wield will be a challenge, even for the new financial paradigm. Regulations, taxes, legality…these will all be hurdles that will likely be faced, and most likely overcome.
Momentum is Stronger Than Resolve
This new financial world is rolling with a momentum that even the most shrewd, ‘connected’ bureaucrats will find challenging. The methods of the past, herding the people of their nation like a flock of passive sheep, will not take hold as it has before. Borderless, nationless currency is here, and certainly won’t go away without a massive struggle – one that no country really has the resources or the resolve to strike down. It’s too late.
Is This Good?
Well, C’mon… it’s money… “For the love of money is the root of all evil” – words that much of the world knows, even though they defiantly ignore the context. And, in the heart of most people, it’s a struggle not fought very often. When you’re talking about money, there is so much at stake – as there always is. Golden corn or crowns of gold, when it comes down to it, there is an important formula hiding deep in our daily lives. But it’s simple:
Money = Power = Strength = Control
Nobody wants to relinquish their control, strength, power, or money when it can be right there, in their hands …or the ether. And, just as time will keep ticking on (at least for now), so will fiat currencies for as long as there are taxes to pay and kids to feed. The power and control will likely shift back and forth during this struggle but in this new paradigm, there is no model where control can reman in the hands of the rulers. The genie is out of the lamp, and it can’t be put back inside. So, the real X-factor of this lifetime is whether or not the people will recognize, seize, and maintain the control they have suddenly created…