Updated: Apr 11, 2021
At Diaspora Psychedelic Society, one of our core missions is helping people become self-sufficient, independent, and free. In order to be truly free one must have freedom in all aspects of life.
In 2009, an anonymous person or group named "Satoshi Nakomoto" created Bitcoin. The first distributed ledger and mechanism for peer to peer transactions. Bitcoin was invented to enable people to send payments and store wealth in a decentralized manner, meaning that no central authority is needed for you to send a payment, it is peer to peer. I highly suggest anyone interested in the technology behind it to read the full whitepaper here: https://bitcoin.org/bitcoin.pdf Bitcoin is the most well known and widely used cryptocurrency today, but since 2009 there have been many innovations in the field of cryptocurrencies and distributed ledger technologies. Never in history has mankind ever had a way of sharing a distributed ledger in a trustless manner. The implications of this are staggering, I will explore them together with you in this article and try to simplify the technology and use cases as best as I can. I will also explain how adopting cryptocurrencies and smart contracts can lead to a more democratic and fair world.
In this article we'll cover the following:
The 3 main innovations since 2009.
The most relevant and important use case for the world today.
The intersection between spirituality, psychedelics, and blockchain.
Let's have a look at the main innovations that have occurred in the world of blockchain and DLT (distributed ledger technology) since 2009. 1. Bitcoin solved the initial problem of trustless transactions without the risk of "double spending" https://www.investopedia.com/terms/d/doublespending.asp#:~:text=Double%2Dspending%20is%20the%20risk,power%20necessary%20to%20manipulate%20it.)
Before bitcoin, all digital payments had to go through a bank. This means that a centralized authority must first approve of your transaction, essentially you are trusting them to be good actors and fullfill their end of the bargain. The hard truth is that the international banking cartel does not share the same mission as the average person, they want to maximize profits and minimize their risk. Central banks print money out of thin air and issue it to governments as DEBT, all debt must be paid back at some point with interest. This means that all fiat currency in the world are destined to inflate endlessly, as there must always be more paid back than was initially issued. For this reason, we can conclude that fiat currency is essentially debt, a promise to a central bank, who created it out of thin air. Crazy right?
I highly suggest watching this video (https://www.youtube.com/watch?v=iFDe5kUUyT0&t) on the creation of money. This should be taught in schools, yet it isn't and very few people know how money is actually created. The situation in 2020 is even more bleak, as traditionally banks have had a reserve requirement of 10%, meaning they are obligated to always have 10% of all deposited funds available for withdrawal, the rest is lent out. Recently this has been changed to 0%.
https://www.federalreserve.gov/monetarypolicy/reservereq.htm Now beyond the fact that banks aren't even legally obligated to have your money available to you anymore, it gets even worse; as the total money supply has also been consistently increasing over the last 35 years. (note the accelerated rise in 2020)
The increase of money supply is inherently unfair to the working class, as people who depend on a wage and are unable to save, are consistently losing purchasing power and becoming poorer. While the wealthy, whom hold wealth generating assets instead of debt inducing liabilities, are consistently getting richer. This is known as the Cantillion effect. (https://www.aier.org/article/cantillon-effects-and-money-neutrality/#:~:text=The%20Cantillon%20Effect%20refers%20to,flow%20path%20through%20the%20economy.)
The only way we can mitigate the Cantillion effect is by taking control of our own finances, and by adopting a peer -to-peer monetary system which is free from government intervention.
The main benefit of using Bitcoin is that instead of trusting a bank, government, or another centralized authority (whom might not have the same interests as you) you are trusting an IMMUTABLE protocol based on mathematics. Another benefit is the fact that there are 21 million bitcoin in existence, and this supply will never increase or decrease, it will always be 21 million.
2. After the creation of bitcoin, innovators quickly realized that there are more pieces to the puzzle. Blockchain can be used for much more than simply peer to peer transactions and storing wealth. In 2014 Vitalik Buterin created Ethereum. Ethereum was presented to the world as the first trustless shared worldwide computer. Ethereum is essentially a network that allows people from all over the world to participate in trustless systems through the use of smart contracts. A smart contract is a self executing digital agreement, once the rules have been made and the contract is deployed, the contract will execute by itself once all parameters have been met. ANYONE can make their own token that operates on the Ethereum blockchain, they can create any type of protocol or system they think is a good idea. And since 2014 there have been many revolutionary concepts and use cases created. Examples are: voting, identity, prediction markets, supply chain tracking, scheduled payments, loans, etc. All accessible to every single person on the planet, without the need for a passport or bank account. (31.5% of the worlds population has no bank account)
3. The last problem: creating and incentivizing definitive truth, solving the Oracle problem. In order for us to be able to trust Smart Contracts, we must have a way of making sure that the data which is being fed into the contract is correct. Data is collected by a mechanism called an Oracle, if an Oracle provides faulty information then the contract can not be trusted. In 2017, Sergey Nazarov presented a solution to the oracle problem, he had been working on this since at least 2013. In fact The Oracle Problem is something that has fascinated philosophers and scientists for centuries; How can we verify that the data which is being provided to me is correct? Furthermore how can we ensure that there is no incentive to provide false information, or that the cost of providing false information is greater than the rewards for doing so? That's quite a mouthful and it's indeed a very complicated issue to solve. It might be one of the most significant leaps forward for humanity since the creation of the internet. Imagine a world where there is a greater incentive to tell the truth over telling a lie! This is a world I dream about every day, and we are getting closer to this being a reality by every passing day.
The way to create this world is by having something at stake for providing information. This is called a proof of stake consensus mechanism. Here is a good explanation of the Oracle Problem and how Chainlink aims to solve it https://blog.chain.link/what-is-the-blockchain-oracle-problem/
The most relevant blockchain use case for people today: Decentralized Finance.
Decentralized finance is essentially bank-less finance, it includes borrowing, saving, and spending money all in a decentralized manner. In 2020 this space has been evolving extremely fast, going from 700 million to over 10 billion USD of total value locked in Defi smart contracts. A tenfold increase in just over 9 months.