Evolution of money: Cryptocurrency

Nowadays, many people feel that in our world (and in the world of money) something is going wrong..., but they can't understand what it is, what the cause is and where we are moving? Let us try to clear up the situation, glimpsing at human, money, and cryptocurrency history.

Evolution of people and money

Money had appeared in the dawn of mankind as the medium for exchange, money changed along with people, serving increasing demands of growing communities. Groups combined into tribes, then settlements, later into cities, and after into states. While growing, the communities became stronger and competitive, and the interactions within them, including economic, began to acquire ever larger scale, variety, and significance.

In any new stage of development of civilization, money evolved as well – it became more functional, changing for increasing requirements and completing additional tasks ever more effectively. Money became the main tool in such important processes as trade, savings, lending, investment, taxation, regulation, etc. Currencies issued by states also became the key mechanism of control and management within the country as well as at the international level.

To understand the present situation, it is important to realize that for millions of years the human evolution occurred in conditions of the cruel struggle for limited resources, in which won the most successful individuals and communities taking out resources from nature and competitors. Wars did not cease. Obeying primitive instincts to defend interests of their groups, people traditionally inflicted damage on competitive communities, at the same time the majority sacrificed its personal interests for survival of a group as a whole.

In the recent decades, the technology level of mankind has multiply increased, but people themselves are not able to change so rapidly. Religions and states manage to adjust at some extent the inherited "wild" behavior of the population, which allows to build greater, more constructive and effective communities. But unfortunately, to speak of considerable success in this area is still premature. The rapid shift of outer attributes (spears were cast, ties were put on, etc.) doesn't block, but only covers deep-seated instincts which served as a basis of survival throughout millennia.

As a result, we have a picture of egregious inefficiency in the global scale when self-contradictions ever more impede (don't contribute) the further development. At the same time, a significant part of overall potential is spent not on creation, but on destructive struggle of people and groups traditionally striving to win in the evolutionary race at the expense of neighbours. In the old times, such behavior helped people to survive and progress in the environment of small rival societies, today it prevents us from combining efforts in the format of a single global community.

Is it possible to eradicate this primitive instinct of destruction (in globalization - self-destruction conditions) and turn to the next level of development? It is necessary to tackle this problem as soon as possible in order not to die in fire of even more destructive means of resistance. New common security systems in all the key areas (including the world of finance) are to be developed with the use of modern tools emerging as a result of technological progress. The results of introduction of the Internet and decentralized technologies of effective interaction based on the Internet demonstrate vast potential of this direction...

It is impossible to forecast the future, but it is evident, as always, money must change after any other changes occured. Obsolescent payment systems always lost their role and new ones capable to resolve all the spectrum of urgent problems replaced them. Already now it is hard not to notice an explicit mismatch of the current financial system with direction and dynamics of overall development. If in such areas as public health, struggle against crime, arms control, etc., the nations manage to jointly develop new decentralized common security mechanisms, its users are not admitted to participation in change of the existing financial system.

Why is it like that? Let us go back in history. In the twentieth century, the world of money underwent more significant changes than in the whole previous period. For centuries, silver and gold carried out role of the recognized cash equivalent, but the physical limitations of its vast use made service of expanding economy more difficult. Besides, the authorities were always interested in replacing of hard controllable gold money with various paper substitutes. An unlimited issuance of "paper currency" and the opportunity for bullion market manipulation allowed to deprive gold of its monetary functions in favour of so called fiat money, only declaratory «secured».

Permissiveness which became a result of concentration of power of issuers of the key fiat currencies spawned a number of negative processes – play with an interest rate, credit gambles, manipulation of the stock market, currency wars, real wars, etc., having subordinated world finances (and the economy with policy through them as well) to the interests of the "new elite". Nowadays the world financial system significantly transformed into the global system of deprivation of resources of planet neighbours under which many "vassal states" become poorer and lose their independence. It all does not leave hopes that financial elite acting in its own interests is interested in improvements and is able to resolve problems created by it.

Actually, like clients of the only bank, all the world is offered to remain passive users and hope for conscience of those in whose hands power is concentrated. Such a hierarchy imbalance can't last perpetually and will lead sooner than later to the migration of users to alternative decentralized tools of financial interaction capable to fairly serve the interests of the majority of participants of the system. And, the longer this problem will remain unresolved, the more painful an inevitable transition to a new monetary system of the next generation capable to resolve all accumulated problems will become. But when and how precisely this will happen is not known.

But there is good news – technology, program, and cryptography innovations of the recent years allowed the enthusiasts to develop their own models of payment systems. The programmers combined efforts to create cryptocurrencies - alternative non-national currencies with their own monetary unit, their issue, infrastructure, etc. Cryptocurrencies even in the «baby- stage» managed to prove their viability in practice – throughout the world, thousands of people and organizations already use these technologies – and market capitalization steadily holds the mark of several billion US$ dollars. Cryptocurrencies become, along with the Internet, a part of an overall trend of release and a union of people in the framework of the sole community.

An appearance of cryptocurrencies. Bitcoin.

In 2008, the first cryptocurrency Bitcoin began to develop. The proposed concept of the decentralized payment network differs so much from old solutions that its advancement and its potential fulfillment will still take some time. The other innovations such as electricity, cars, planes, the mobile communication, the Internet, etc. adapted in a similar way for mass use. Freedom of movement, communication, etc., recently seemed to be science fiction, today became reality, having directly or indirectly improved everybody's life. The main value of cryptocurrencies is that they ensure one more degree of freedom – freedom of personal finance. The wide circulation of this technology will lead to a vista of significant changes in many spheres.

Omitting technical details, Bitcoin can be described as the electronic payment system using its own currency with a limited issue (pattern of decreasing extraction as gold) and operating through a secure decentralized network. The Bitcoin network automatically certifies transactions, at the same time security and reliability are provided with the use of cryptography and up-to-date information technology. Before Bitcoin appeared, the operation of all payment systems had based on power of the central trusted body (bank, payment service, etc.) establishing accounts of the customers and certifying all their operations. Thus, in the banking system the transactions are executed when they are confirmed, secured, and executed by banks. At the same time, the users are in with a complete dependence on banks themselves, as well as on all superior organizations. Money in a banking system can be tracked, blocked, excepted, diluted by inflation, etc.

It is a different situation with Bitcoin. Bitcoin technology allowed to refuse from certification of transactions by intermediaries – all translations are checked in a decentralized way and are certified by the Bitcoin network itself which functions in a distributed manner, as in torrent networks. The Bitcoin system does not belong to anyone, its users are equal and the program source code is open and publicly accessible, it guarantees an independence, justice, and safety. To open an account and to start to use Bitcoin, users should not open their identity and obtain someone's permit. It's enough just to connect to the Internet and to install a Wallet program. At the same time, all transactions are executed directly and thus can not be blocked, etc. There are opportunities for the exchange of Bitcoins for national currencies, as well as for direct payment with them in stores.

The independence of Bitcoin excludes external influence on the operation of the network and is the basis of its key advantages over the banking system. The schedule of emission of new Bitcoins is algorithmically fixed for the next decades excluding uncontrolled inflation typical for fiat currencies. Absence of intermediaries means low commissions for transactions, and the continuous operation of network guarantees users an automatic transfer of any sums from any world point anywhere within 10 minutes without intermediaries, restrictions, and risks. Recently, it was hard even to imagine such a thing and now it became a real possibility for everyone who has Internet access.

But over time, restrictions and deficiencies are discovered even in the ingenious Bitcoin concept. It is normal, as it is impossible to create an ideal stable system on the first try. The developers have already removed many Bitcoin problems and some deficiencies were corrected via connection to a system of exterior elements and services (at the same time, it was necessary to slightly abandon principles of a decentralization and an independence underlying a success). But there still remain even such restrictions that are either difficult or are possible to overcome only through various "tricks" not correcting, but covering fundamental deficiencies of the system.

So low adaptiveness of Bitcoin architecture is the downside of its high reliability and stability, which applies the restrictions on the further development of a project. During the recent years, the Bitcoin network improved mainly only basic functionality, while the majority of new possibilities was added through the start of external centralized "add-ins". But today, despite all conceptual limitations, Bitcoin functions reliably, it is widely known and remains the most popular and demanded cryptocurrency.

Further information about Bitcoin is presented on https://bitcoin.org/

Evolution of cryptocurrency. Dash.

Some developers who are enthusiastic about Bitcoin success were not limited by the narrow framework of its architecture, but started alternative cryptocurrencies with changed parameters and the principles of operation. But soon it turned out that to win popularity is impossible only by "cosmetic" improvements of Bitcoin source code. It was necessary to offer users the significantly best solutions. From several hundreds of alternative projects, only few possess necessary features for long-term development and success in "great cryptocurrency evolution". The Dash/Darkcoin project which started in the beginning of 2014 is particularly noteworthy among them.

The Dash developers took Bitcoin code as the basis and are developing their "ideal cryptocurrency" – Digital Cash. First of all, a concept was advanced. For sustainable functioning and development of any cryptocurrency, a well-coordinated operation of many interconnected systems and processes is required: maintenance of network infrastructure, provision of computation power, financing of development, promotion of a project, etc. Effective self-regulation is necessary because the problems with any key process delay and put on threat all the project. The Bitcoin model is too simplified and envisages encouragement only of the participants of the network who provides the cryptographic protection (so-called "miners"). At the same time, the rest of Bitcoin components loses system support and operate arbitrarily. The advanced Dash concept includes decentralized mechanisms of encouragement and self-tuning of all important elements, which improves stability and project survivorship in general.

Further, the technology itself was advanced. The basis of all key benefits of Dash is a two-level architecture of its distributed network. Traditional single-level Bitcoin network is able to perform only the simplest slow operations: once in 10 minutes the consensus is reached and verified transactions are recorded to the allocated registry of operations. Two-level Dash network works in different way: the secure network nodes can reach consensus continuously, in real time. It allows to introduce speed protocols (without violating the principle of decentralization), that opens new possibilities unavailable for usual cryptocurrencies.

On the basis of this platform, such high-demand processes as Anonymization (exterior observers can not track transactions, balances, and a history of payments of users), the Fast transactions (complete confirmation of transfers in 5 seconds as bank cards), the Vote (decentralized development and project financing governance) are already implemented. In the future, possibilities of two-level Dash network can be used for introduction of such solutions as Distributed Storage Systems (lists of transactions, registries, messages, etc.), Distributed Application Systems (exchanges, stores, services, etc.), support of the Third-party projects, etc.

The further development of Dash will be determined by a voting system that is now being implemented. This unique tool for the world of cryptocurrencies will allow Dash to use all benefits of democracy, effectively using resources, knowledge, and experience of participants of a community. Anyone will be able to make proposals aimed at development, to justify budget and to receive target funding, if the community approves its initiative. The talents will be able to be self-actualized, receiving at the same time not only moral but also monetary satisfaction. Similarly to how communities with democratic principles inevitably anticipate dictatorships, Dash will be able to evolve more effectively than other cryptocurrencies, which limits their development.

Thus, instead of creation of the cryptocurrency with a limited set of some functions, Dash creates a platform adjusted to the maximum to the further effective development, adaptation, and promotion of any new cryptocurrency technologies.

Further information about Dash is presented on https://www.dashpay.io/

There are other interesting cryptocurrency projects proposing different sales of payment and auxiliary systems as well.

Conclusion

Search of more effective and less destructive forms of development directs a progressive part of humanity by the path of joining into a sole community in which the world of finance is an important element. But the existing financial system doesn't foster it, but pushes the world back to the barbaric past with constant wars and mechanisms of control, oppression, and enslavement of individuals, as well as all states. Evolution of money can turn the World from the tool of dictatorship into the means of achievement of financial freedom, independence and efficiency.

The innovative technologies that recently emerged allowed to create cryptocurrencies, alternative money which is able to become a global independent instrument limiting the power of the current financial elite. By virtue of the decentralized nature, cryptocurrencies do not need any permit and can work everywhere, but the issue of their big application is to a greater extent a social than a technical issue. The people should find out the emerged alternatives and dare to use them. Realization of alternatives is the first step towards liberation and extensive discussion helps this realization.

The more people learn of cryptocurrencies, earlier all improvements associated with them come into our life. If the touched topics did not leave you indifferent – share the link of this article with your environment.

By: Alex-ru
Source: Dashtalk.org