Bitcoin, Ethereum… How cryptos can change the nature of money

It is customary to consider that money, an economic tool that we use every day, has the function of being an instrument of exchange, a unit of account, and a store of value, a definition often attributed to Aristotle, 4 centuries before our era.

In the ambient economic environment, it is possible to observe that a wind of innovation is blowing on monetary issues, of which the ecosystem of the said cryptocurrencies may have been the initiator, the digital currencies of central banks possibly being the relay of this type of initiative.

It appears in a marked way within the ecosystem of the said cryptocurrencies, that certain currencies, such as Bitcoin, present from an economic point of view a hybrid character of financial assets, merging with the classic functions of money. Bitcoin is today a tool of exchange, a store of value, and a unit of account in certain repositories, and also a volatile financial asset governed by market processes.

The accounting approach VS the real approach

The economic and financial world has had the habit of approaching the monetary question in an accounting approach, money being thus perceived as a standard, the unit of account. This is reflected in the ecosystem of digital currencies, by a technological definition of money as ” account-based literally translated as “account-based”. In the current use that citizens can have of money, with a real or symbolic physical approach, money can also be perceived as a coin or a token, which translates into a technological definition of money as ” token-based literally translated as token-based. In the traditional financial and economic ecosystem, our electronic money is based on an account, which is also the case for Bitcoin to some extent with a public address on which units of account are located. Regarding Ethereum, the public address of an Ether is associated with technological tokens that can be programmed, via the so-called ” smart contracts or smart contracts. This difference in perception of money between an accounting approach of unit of account, or physical of exchange instrument, can be perceived as secondary verbiage, but has an impact on the related technological choices, and the use of currencies. which is then made of it in practice. Indeed, the physical technological approach based on an Ethereum token has thus enabled the creation of the famous artistic NFTs in particular, these works of art or luxury whose NFT tokens are the digital representation and certification, with a form of physical digitality of tokens.

To go further, money can thus demonstrate that it has a physical and economic asset property, a ” asset in the language of Shakespeare:

– closer to a use asset as was the case in the world of barter in the exchange of physical objects, a chicken, apples, a kilo of flour, and why not an NFT.

– or a financial asset as is the case for many top-tier cryptocurrencies.

This physical reality that emerges in the nature and definition of money thus appears implicitly in the practical ecosystem of digital currencies, money thus becomes a tool of exchange, unit of account, reserve, and digital barter, in the form of digital physical assets, sometimes intelligent, or financial assets, like a return to basics.

This porosity which thus appears between the various economic functions of the monetary tools, presents in the practice of the potentialities of use and technological very marked.

Thus, Bernard Lietaer, Belgian economist and academic, who was a member of the board for the creation of the ECU, monetary ancestor of the Euro, and professor at the University of Berkeley in California until his death in 2019, worked for the creation of an institutional monetary ecosystem presenting a wealth of currencies of different natures, and hybrids, a project that contemporary technologies, including the Blockchain, would make it possible to achieve.

His vision of the nature of money was a complementary approach between Yang coins, symbolically masculine, and Yin coins, with a feminine philosophy.

Synthetically, Yang currencies are national currencies, rare, encouraging competition, creating financial capital, used for international trade. Yin currencies are considered as complementary, cooperative currencies, issued in sufficient quantity, with the aim of creating social capital.

New technologies thus make it possible to realize from a theoretical point of view in the real world all of these monetary visions on a different nature of money, all within a wise and informed institutional framework, but innovative and audacious.

Beyond that, by coupling the philosophies of complementary currencies, with the nature of money which is expressed step by step as a monetary asset, it is possible to create active currencies with quite remarkable economic and human potential.

An example could be dual currencies. It is sometimes said in certain philosophies of life “that one must give in order to receive”. In the classical economy, the payment/gift of money is made against an economic or financial asset, according to so-called market rules. Would it thus be possible to create a “currency”, a dual monetary asset, the payment of which for a good or a service, is made in a bilateral exchange of monetary asset, or complementary to monetary asset. Concretely, you go to the pizzeria, you pay at the end of your meal for your pizza in euros according to traditional methods, you have the possibility of paying with dedicated institutional monetary assets, tokens, good points, for the service of the restaurant , or to receive some as a pleasant client. These complementary tokens being, for example, originally distributed in “Air Drop”, or helicopter currency, by the states in coordination with the central banks to individuals and traders. In this example, the duality axis of the exchange could be monetized in reference money euros, only if a certain number of “Matches” between good points/tokens received and good points/tokens given, could be expressed, in a complementary balance of market exchanges. The classic economic relationship thus opens up to different dimensions in a duality of complementary commercial and economic relationships. It goes without saying that the dimension of reciprocal satisfaction in the commercial relationship could extend to environmental dimensions, to dimensions of perception of quality, to human and social dimensions of all kinds. A point of attention would be that the dual monetization of these dimensions not monetized to date, would require a fine economic architecture, to avoid deleterious side effects.

Beyond that, we can thus understand that dual currencies, open to complementary monetization dimensions of exchanges, along axes for example ESG (Environment, Social, Governance), open up a form of spectral vision of economic exchange, and to exchange spectra of different economic frequencies, it is thus to exchange waves, and energies, according to the physical definition (see for example the definitions of the Fourier transformations on Wikipedia for the most curious on these themes). Will the new monetary technologies therefore make the economy a game of energy exchange in the long term, that is quite probable.

Thus, through the so-called new technologies, a new perspective on the nature of money is emerging step by step. Whether Bitcoin, Ethereum, Hyperledger, will be digital currencies, a founding act of even deeper structural monetary and technological transformations, this is very likely. Are there today monetary technologies designed by design to exchange monetary assets in the strict sense, see wave monetary assets, not “by design”. Programmed money is thus not, in the strict sense, programmable money.

In this period when it is said in various circles of military intelligence, and under various flags, that the nerve of certain wars is the balance of power between competing monetary zones, existing or under construction, and that to find practical reasons to go to war, and then quite easy, it would perhaps be fashionable to think about other monetary prospects for humans and humanity.

In France, will our advanced technology specialists like Thales, Dassault, Atos, Wordline, be able to develop advanced technologies for monetary peace in economic warfare, based on potential changes in the nature of money, at the serving people and progress?

Cryptocurrencies: three questions about the crash that knocked bitcoin off its pedestal