The future of money | Neha Narula

Translator: RADWA ELKASHTAWY Validator: Anwar Dafa-Alla I want to talk to you about the future of money. Let's start with a story about that culture Which arose in Micronesia in the early twentieth century and was called (Yap). I want to talk to you about Yap now. Because what their money looks like is really interesting. They use these limestone discs called ray stones. Yap doesn't really move these stones from one place to another Or exchange it as we exchange coins, Because rai stones can get really huge. The largest of them weighs four tons and is twelve feet wide. So (Yap) kept informed of who owns which part of which stone. There is a story about these sailors Who were transporting one of the stones across the ocean When they encountered a problem, the stone fell into the water. The sailors returned to the main island And tell everyone what happened. So everyone decided it was, yeah The sailors have the stone – why not? – It still counted. Despite being at the bottom of the ocean, It was still part of the Yap economy. You might be thinking that this is just a simple culture Hundreds of years ago.

But things like this happen in the Western world as well. And Yap still uses some form of those stones. In 1932 the Bank of France demanded from the United States Converts its assets from dollars into gold. But it was very inconvenient to consider charging These quantities of gold are to Europe. Instead, someone went to the place where the gold was stored And he put a sign on it indicating that France owned it. And everyone agreed that France owns this gold. Just like ray stones. The point that I wanted to make from these two examples Is that there is nothing of value in the first In a dollar, stone, or coin.

The only reason there is value for such things Is that we've all decided it's valuable. And because we decided that, It has become. Money is about swaps and trades That we do between each other. Money is not a tangible thing. It is a shared story about the value we share with each other. Collective fiction. This is a very powerful concept. In the past two decades, We started using digital money. I get paid by depositing money in the bank, I pay the rent through a bank transfer, I pay my taxes online.

And every month, A small amount was deducted from my salary And he invests in investment funds in my retirement account. All of these interactions Literally, only 1's and 1's change on computers. Even there is nothing physical, such as a stone or a coin. Digital money makes me able to pay someone anywhere in the world Within seconds. This method works Because large organizations write every 1 or 0 It changes on the computer. And when that doesn't happen, It is mostly the fault of these institutions. Or at least the solution to the problem lies with them. Many times they don't. There are many obstacles in the system. How long did US credit card companies take To apply Ship and Bean? Half of my credit cards are still not working in Europe. These are obstacles. Transferring funds across borders and into other currencies Its cost is high: Obstacles.

A business woman in India can set up a business on the Internet within minutes, But she finds it difficult to take out loans and receive money: Obstacles. The extent to which digital money is available to us and our ability to carry out financial transactions with ease Limited to those controls. And there are many hiccups in the system that make things slow. This is because digital money is not really my property. They are entries in my bank's databases, And my credit card company or my investment institution. And these companies have the right to say "no". If you are a PayPal customer And Albay Pal wrongly accused me of forgery, That is enough. My account freezes and I'm not being paid. These institutions stand in the way of creativity. How many of you use Facebook and Google photos And Instagram? My photos are everywhere. It's on my phone and laptop, It is on my old phone and in Dropbox. It is found on all these websites and services.

Most of these services do not work with each other. They do not interfere operationally As a result of this, My photo library is a mess. The same thing happens When institutions control the money supply. Many of these services do not work with each other. This results in obstruction of the payment process. Financial transactions become costly. So far we have gone through two phases of money. In an analog world, we have to deal with those physical things, Money moves at a certain speed – the speed of humans. In a digital world, money can get farther and faster. But we are at the mercy of these ruling institutions. Money moves at the speed of banks only. We are about to enter a new phase of money The future of money is programmable.

When we mix software and currencies, Money becomes more than a static (equilibrium) unit of value We don't have to rely on institutions to be safe. In a programmable world, We remove people and institutions from the loop. And when this happens, We will never again feel that we are doing financial transactions. The money will be directed by software, It will flow safely and accurately. Cryptocurrencies are the first step in that development. Cryptocurrencies are digital money It is not run by any government or bank. It is money that is determined to trade in a world without intermediaries. Bitcoin is the most popular cryptocurrency. But there are hundreds of them. There is Dogecoin, Stellar, Litecoin, Ethereum And these are just a few of the most famous of them. And these things are real money. The sushi restaurant on my street Accept bitcoin. I have an app on my phone that allows me to use it to buy sashimi.

But it's not just for small transactions. There was a 100,000 Bitcoin transaction last March. Which equates to forty million US dollars. Cryptocurrencies are based on a special field in mathematics It's called cryptography. Cryptography is the study of how communications are secured. It revolves around two very important things: Hide information where it becomes unnoticed, And documenting the source of some information. Cryptography is part of the foundation of many of the systems around us. And he's so powerful that at one point The US government classified it as a weapon. During World War II, encryption breach was a mysterious thing He was critical in deciphering the enemy's correspondence He was enough to turn the tide of war. Today anyone has a modern internet browser It operates a fairly complex encryption system. We use it to secure our online interactions. It is what makes our passwords safe online And it secures the financial information sent to the websites. So what banks used to give us – Reliable digital cash transfer – We can now get it in cryptography.

This means that we no longer need to rely on banks To secure our financial transactions. We can do this by ourselves. Bitcoin is based on the same idea that Yap used. This cross-cutting shared knowledge of conversions. In bitcoin, I exchange it when I transfer it, I get paid when someone transfers Bitcoins to me. Imagine if we had those magic papers. And these papers work by giving you a sheet of them And if you write something on it, It will magically appear on my paper too. Let's say we gave everyone that paper And everyone wrote down their conversions In the Bitcoin system. All these transfers are copied on everyone's papers. And I can look at my paper And I'll have a list of all the conversions that happen In the whole Bitcoin economy.

This is exactly what happens in the Bitcoin blockchain It is a list of all Bitcoin transactions. Except that it is not done through papers. It is through computer code, They are found on thousands of computers connected to the Internet around the world. All these computers confirm in common Who owns any Bitcoin. So the Bitcoin blockchain is at the core of how Bitcoin works. But where does Bitcoin come from? Well, the token is designed to make new Bitcoins According to a schedule. And the way it works is to get that bitcoin, I have to solve a puzzle – a random coded puzzle. Imagine if we had fifteen dice, And we roll that dice many times. And whenever the number six appears on all the dice, We have won. This is very close to what computers actually do. It keeps trying again and again to reach the correct number. And when you succeed in this, We say she solved the puzzle. Computers that solve the puzzle You deploy the solution to the rest of the network And you collect the reward: it is new. And while solving that puzzle These computers help secure the Bitcoin blockchain It adds to the list of transactions.

There are actually people around the world who run these programs. We call them Bitcoin miners. Anyone can become a Bitcoin miner. You can go and download it now And you run it on your computer and try to collect some bitcoin. I cannot say that I recommend this, Because the puzzle is currently very difficult and the network is very strong, If I try to extract Bitcoin on my computer, I would probably not see any of it for two million years. The miners, professional miners, use special devices Designed to solve puzzles very quickly. Now the Bitcoin network and all these private devices There is an estimate that the energy you use Equivalent to the power of a small country. The first batch of cryptocurrencies Slow and somewhat extravagant. But the new generation will become much better and significantly faster. Cryptocurrencies are the first step For a world with global, programmable money. And in a world with programmable money, I can pay anyone accurately Without the need to register or take permission, Or I am transferring or worry about my money getting stuck.

And I can send money around the world. This is really cool. It's an idea about innovating without permission. The Internet has caused an explosion of innovation. Because it was built on an open architecture. And just as the internet changed the way we communicate, Programmable cash will change the way we pay, And assignment and evaluation. So what world does programmable money shape? Imagine a world where I would be able to rent my healthcare data For a pharmaceutical company. They can do extensive data analysis And give me encrypted proof They use my data in the way we agreed. And they can pay me for what they find. Instead of registering for streaming services Pay TV bills, What if my TV analyzed my viewing habits Suggested content at a good price that fits my budget And fun to me? Imagine an internet without ads, Because instead of us paying without being aware when we are viewing content, We just pay.

Interestingly, things like small payments It will transform the way security works in our world, Because once we are able to allocate value in a better way, People will use their money and energy More constructive things. If sending the email costs a fraction of a cent, Will we still receive intrusive messages? We are not in this world yet, But it is coming. Currently we are in the world that is watching the car for the first time. The first cryptocurrency is like the first car, Slow and difficult to understand and use. Digital money, such as horse and cart, Work well, And the entire world economy is built on it. If you were the first person in your building Owns a car with an internal combustion engine, Maybe your neighbors think you are crazy: "Why do you want that big, loud machine?" That constantly crashes and catches fire, Still slower than a horse? But we all know where that story turned out.

We are entering a new era of programmable money. This is something that causes enthusiasm and fear at the same time. Cryptocurrencies can be used in illegal transactions. Cash is also used in crimes today. When all of our transactions are online, What does this mean for monitoring – who can see what we're doing? Who benefits in this new world and who is not? Will I ever have to pay for things that were previously free? Will we all become slaves of mathematical rules and utility functions? Every modern technology comes with concessions. The Internet has provided us with many ways to waste time. But it also helped increase production exponentially. Cell phones are annoying Because it makes me feel I have to stay in touch with work Always. But at the same time it keeps me in touch with my friends and family. The new sharing economy will eliminate some jobs. But it will create new and flexible forms of employment. With digital money, We separate the need into large, trusted institutions For communication network construction engineering. This drives innovation in cash in a big way Programmable money makes money democratic.

Because of this, things will change and unfold In ways we couldn't have imagined it before. thank you. (clap).

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