Summary of the book “The Age of Cryptocurrency. How Bitcoin and blockchain are changing the global economic order. Chapter 1. From Babylon to Bitcoin.

Preface

Digital currency for the digital age

Success is not brought by money, but by the right to earn it

NELSON MANDELA

Despite the fact that Parisa Ahmadi was considered one of the best students in her class at the Hatifi School for Girls, located in the city of Herat (Afghanistan), her family was against her studies. But one public organization offered to teach girls how to work on the Internet and social networks for free, and even moreover, to pay them a small stipend. “Here in Afghanistan, a woman’s life is limited to the walls of her room and school,” Parisa wrote in one email.[1] In Afghanistan, women do not have access to the Internet either at home or at school. Most likely, Parisa would have found herself in the same position if she had not shown rare persistence. After all, she studied better than anyone and really wanted to study additional disciplines. From the girl's point of view, this was a good reason. By her own admission, she had to convince her family “very persistently” to get permission.

Behind the mentioned project was a public organization - the association of creative workers from the USA Film Annex, which actively used social media and paid money through its website to 300 thousand bloggers and filmmakers who took part in their activities. In Afghanistan, Film Annex implemented the Women's Annex computer literacy program for women, established jointly with Afghan businesswoman Roya Mahbub. Thanks to her, about 50 thousand Afghan girls study in schools scattered throughout Afghanistan. Ms. Mahbub has become a global celebrity: Time magazine included her among the 100 most influential people in the world. One of the few female CEOs {1} in Afghanistan, Roya Mahbub runs a software company called Afghan Citadel. The education of Afghan women became her calling. Women's Annex opens classes in local high schools with only female teachers. It was because of the latter circumstance that the Ahmadi family finally gave in and allowed Parisa to attend the class.

The girl started taking classes in 2013. She and her classmates learned a lot about the Internet, social networks and blogs. A big movie buff, Parisa enthusiastically wrote reports on the films she watched. She started blogging, and readers praised her work. This brought the first income in her still short life.

Another thing that is not available to most women in Afghanistan is a bank account. It is believed that if a girl suddenly has money, she should immediately deposit it into the account of her father or brothers. Most Afghan women simply cannot imagine how it could be any other way. In this sense, Parisa is lucky: other girls in a similar situation are simply denied access to funds by their male relatives, disposing of them as if they were their own.

Parisa's fate changed dramatically at the beginning of 2014. The founder of Film Annex in New York, Francesco Rulli, aware of the difficulties faced by girls like Ahmadi, and also not wanting to lose large commissions for transferring relatively small amounts around the world, revolutionized the Film Annex payment system[ 2]. He decided to pay blog authors in Bitcoin, an electronic currency that appeared seemingly out of nowhere in 2013. It was created by a small group of incredibly dedicated, free-thinking and romantic techies who developed the necessary standards and told anyone who would listen that this currency would change the world. Rulli shares one of the variants of the philosophical concept of “capitalism from scratch,” so he very quickly recognized the benefits of Bitcoin, especially for Parisa and another seven thousand Afghan girls who were also on the list of Film Annex blog authors and received payment for their work. Bitcoins are stored in electronic bank accounts, that is, in electronic “wallets” that anyone can open right from home if they have access to the Internet. There is no need to go to the bank to open an account or present documents to prove that you are a man. Indeed, Bitcoin does not care about your name and gender, so a woman in a patriarchal society gets the opportunity to control her money - of course, if she has access to the Internet. The importance of this opportunity cannot be overestimated. A woman finally has something of her own that belongs only to her, and not to her father or brother. Of course, this is by no means a solution to all problems, but the ultra-progressive technology of the 21st century provides a real opportunity to end the oppression of an entire segment of the world's population.

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Interview by Paul Vigny with Parisa Ahmadi via email, July 4 and 11, 2014.

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CEO is the general director of a company. Note ed.

The era of cryptocurrencies: Rules of a game without rules

What are cryptocurrencies, and how do they relate to the digital economy?
Where? For what? We lived without them. It would seem that. Demand creates supply, and if we understand who creates the demand for the existence of cryptocurrencies, we will understand the scope of their use. The easiest way would be to blame video card manufacturers, for example. But, in fact, in life everything often happens differently.

It is generally accepted that human society is developing, and this development is expressed in changes in economic structures; each period of development has its own technologies, including financial ones. Calculations have powered economics since the Stone Age. It was probably a natural exchange back then. But the development of the means of production, new opportunities due to progress, demanded new payment systems, formed requirements for them, and then a measure of value appeared in the world - gold and silver, then coins from them, then progress demanded the appearance of settlement bills, banks and banking, paper banknotes and led us to cashless payments.

The technological and technical development of mankind, a new way of life, and progress each time created a demand for new calculation systems to ensure the existence and development of society. And now the world is on the verge of the emergence of a new economy, the digital economy (hereinafter - DE). New technological order.

No matter how they conjure reality, they say, the digital economy is just computerization, it seems like: they installed a computer in the accounting department, threw out adding machines, hired a couple more people, and the digital economy reigned. But no. DE is a whole complex of transformations, which in the future will completely abolish accounting as a technology.

At the moment, the development of the world has led to a situation where any restrictions interfere with this development. DE removes boundaries, but the way it is measured and formalized using ordinary finance, even non-cash ones, is nothing more than a palliative. The baby has left the cradle and no longer needs a bottle with a nipple. He goes to the kitchen himself, learns to cut and fry meat in a frying pan. And this cannot be changed. You won’t stubbornly drag your grown-up child into a cradle, will you? It's time for change. But new relationships require new tools.

And then cryptocurrencies appear. The road is a spoon for dinner. Although they appeared as an attempt to improve the usual translation system.

Computerization and the need to control finances have led to a global transfer of money from reality to virtuality, to its withdrawal into a non-cash form of existence.

The world of cashless payments has and still has its vulnerabilities. One of them is the issue of trust. This is generally a question of all calculations, any kind. We need a tool that would prove the fact of payment, that is, the path of money should be transparent and at the same time leave the sender and recipient anonymous - to increase the market for using the tool. Solving the problem of trust between transaction participants.

Add decent protection against spam and you get a new information technology that formed the basis for the existence of Bitcoin, for example. Protection against spam consists in the fact that the payer performs a number of actions, the authenticity of which can be immediately verified by the recipient. That is, Bitcoin, in essence, is a “sum of technologies” created to improve the existing system.

And suddenly... It turned out that cryptocurrencies are an ideal tool for digital economics. Not just ideal, but necessary for her to have any meaningful existence. Whatever money printers, bubble blowers and adherents of globalism controlled by transnational corporations might want, the world is developing according to its own laws, and these laws do not take into account anyone’s even very sincere and ardent wishes.

The tool that ensures the existence of the digital economy in accordance with its requests is cryptocurrencies. The convergence of their philosophy, the principles of their existence tell us this; This is the very essence of both cryptocurrencies and digital prices:

• transparency and security;
• decentralization;
• the opportunity not only to buy for regular money, but also to independently obtain funds within the framework of the CE.

This already leads to the need for anonymity. Why? Yes, because otherwise the system will not work to its full potential.

If the digital economy is implemented with a settlement system in the form of cryptocurrencies, the whole world, all processes in the world will be forced to change. Yes, scams, serious losses, new troubles are possible, just as they were possible and happened when introducing paper money, banknotes, bills. By the way, the first banknotes appeared in the 17th century: several banks issued debt obligations of the same type. But real demand and real problems came much later. And the first inflation, and the first counterfeit money. But all these serious difficulties in themselves did not cancel the final victory of paper money. So in the case of payments in cryptocurrencies, everything will happen, there will be scams, and unexpected difficulties with consequences. But nothing will be canceled.

By the way, deliberate scams with cryptocurrencies are also quite likely. Scams designed to develop aversion to cryptocurrencies, followed by an attempt to intercept control in one form or another. To carry out such operations, influence on the transaction market is necessary, and attempts to gain such influence using old methods are already being made.

Paper money changed the world. And cryptocurrencies will change.

Well, as is the case with any serious innovation, there will certainly be many surprises, even surprises, in the field of application. It’s similar to the incident of the meat-roller Budakh from the Strugatsky brothers’ story “It’s Hard to Be God”: instead of the kitchen, the meat-roller began to be used for torture in the Merry Tower.

Surprises await everyone in general. States as independent political units, terrorism as a phenomenon, central banks as mechanisms for regulating finance, stock exchanges as sellers of everything, methods and schemes for the existence of entire industries. The very concepts of “profitable” and “unprofitable” will change. The state will generally lose many opportunities for regulation, but will gain new ones. Life is changing and pulling humanity along with it. If someone doesn’t have time and continues to make payments in cash, chopped silver, they will fall behind, become unnecessary and disappear. This is progress. This is neither good nor bad, it is irrevocable. The Luddites tried to fight, but they did not succeed.

One of the foundations of a real DE is not just getting rid of regulation, but completely (or almost completely) replacing legal restrictions with new technologies. It’s as if the traffic police were removed due to the use of teleportation technology. The traffic police are simply not needed. Well, you don’t have to remove it, of course – it’s still a layer of culture.

However, not everything is so rosy. There are also serious concerns: is this another bubble? (See It's Official: Bitcoin Surpasses "Tulip Mania", Is Now The Biggest Bubble In World History).

But all the phenomena of modern life will have to find their reflection and their path in a new, real digital economy. This means that the issues of financing terrorism will not go away. As well as financing in general for everything. Another thing is that it is unclear how soon this will happen, whether terrorist financing will fill the cryptocurrency market, whether it will occupy some part of the market now, or whether it will be brought there by the natural development of events.

Can we already describe the new world? Not in detail, but we can guess what it will be like. To do this, we need to consider it in the light of attempts to resist its advance by the institutions of the current world. And draw conclusions about the fate of these very institutions - then it is possible to get an approximate picture of the future.

One of these methods is the method of cognitive factor mapping. When in a problem area factors influencing the problem are identified and the structure of dependencies between factors is studied, as well as the dynamics of changes in the importance of factors (“What will happen if the ICO factor increases?”, for example). For the subject area under discussion, such factors are defined (among many others):

• f_blockchain
• f_bitcoin
• f_cryptocurrency
• f_smart_contract
• f_exchange
• f_ICO
• f_hard_fork
• f_mining
• f_financing_terror
• f_laundering
• f_financial_fraud
• f_financial_intelligence

In the general structure of connections between factors, they turn out to be factors with the greatest “betweenness centrality”.

And the greatest measure of influence (authority centrality).

When modeling the dynamics of changes in the significance of these factors, it is possible to see interesting adventures and even look a little into the “anticipated future”.

When considering - only the structures of influence between these key factors.

Worrying factors are also emerging. And we’re not even talking about “financing terror.” This is understandable: the interest in an anonymous and distributed financial system on the part of criminal, terror, and intelligence structures is due to the very nature of these organizations. In fact, these are extremely alarming signals for each of the current major players determining the fate of the world. Those who receive starting advantages will be strong. Whoever clings to the old will lose. There is no need to resist, you need to lead. The prospects are the most exciting. Many global problems will be solved and disappeared. But new ones will arise. Everything will change. From humanity's capabilities for space exploration to the human psyche.

Yes, there are questions. When exactly? How exactly? How fast? What will happen to the current payment systems? But these are all technical questions. Such questions will arise for any branch of human existence.

Much more serious are the problems associated with managing political processes. We will see—and are already seeing—how the usual methods of managing public opinion, methods of solving international problems, and institutions designed to manage global processes become ineffective. The world began to change—and change quickly. We are on the verge of a global avalanche-like change. And this change will take place according to new rules. Rules that are not fully known to anyone. No one yet knows how to manage the new world. What will it be like? What are these rules? Especially in that part of the changes that concern each of us in one way or another. How will the new technological order affect today's global threats? And it will undoubtedly be reflected. In the following articles of the series, we will try to express our humble point of view on these issues. Let's try to understand exactly how the world around us will change.

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