Bitcoin Analyst Andreas Antonopoulos Reveals the Pitfalls of Old Money, Power of Bitcoin and Ethereum
Computer scientist Andreas Antonopoulos, one of the world’s leading cryptocurrency analysts and Bitcoin advocates, says money is a form of free speech. In a new London Real interview, Antonopoulos looks at how money functions in society and tackles one of the key criticisms of Bitcoin and cryptocurrencies – that they have no value and that they are worthless imaginary playthings invented to extract real money from unsuspecting people.
“Money is a language. If you look at it from a very raw perspective, money doesn’t have value. This is an important thing that most people don’t immediately understand: that money itself doesn’t have value. Money is a vector for transmitting value.
It’s how you express value. But the value isn’t in the money. It’s in the product or service you bought with it and it’s in the labors you gave in order to acquire it in the first place. That’s where the value comes from. There’s nothing intrinsically valuable in the money.”
The hyperinflation of certain national currencies has tested this theory, exposing that money has no intrinsic value, with piles and piles of devalued paper Venezuelan bolivars and Zimbabwean dollars offering little utility beyond making arts and crafts.
While some forms of money in the past had intrinsic value, such as gold, Antonopoulos says that that was the best way to establish money as a social construct when it first began. But the purpose of value is communication.
“What you want money to do is communicate value. And it allows us as a society to coordinate markets and behaviors by saying, ‘This is important to me and I’m going to express that to you by giving you three tokens of appreciation that I had to work for.
And the time-cost of money is one of the most important characteristics. We value money, most people value money, based on how many hours of personal labor and effort it takes to acquire. That’s why at some point it becomes funny money when you could acquire it trivially and you don’t work anymore for it.”
Antonopoulos says money is an abstract symbol that we imbue with meaning, and then we exchange it with one another. In other words, it’s language.
“Money is a language of extremely narrow scope and applicability but enormous power because what it expresses is value, especially the value of human time which is extremely valuable to people. And therefore, it allows societies to coordinate on what they communally decide is valuable by aggregating the information of every individual decision you make as to, ‘Is this worth enough of the time value I’ve put into work today? Do I want it enough? Do I value it enough?’ And if you do, you send a signal that other people also coordinate with, that sets prices, that allows us to say, ‘Ok, we need more of this good because that good is important because people are buying it. So it’s a coordination mechanism…
Controlling that language is enormously powerful. If you can control the flows of money, you can control a lot of social activities as well as expression of personal values, which is the censorship and the surveillance capitalism angle of this. Also, if you free it completely, then it gives a degree of personal liberty that is enormous.
Then you can look at it from a technical perspective and say. ‘Well, if it’s just a language, we can make it entirely digital. It doesn’t need to have physical form. We can communicate it instantaneously to any part of the planet. Borders are meaningless. Race, religion, nationality, gender – none of these other social constructs are meaningful in the context of that language.
So true neutrality means anyone or anything to anyone or anything. You don’t even need to be human to engage in the activities of money. Software agents can do it, which is unique to Bitcoin and other open public blockchains. Until now only humans or associations of humans have been allowed to have ownership of assets under law. And now, in fact, not in law, but in fact software agents can independently own money without any human supervision. Which is another mind-blowing thing that we haven’t considered the implications…
We can already create autonomous companies that can operate without human supervision. They’re called decentralized autonomous organizations or DAOs, and that’s one of the really interesting applications that comes out of Ethereum, which is another open blockchain. Ethereum is not about payments. It’s about governance and running software that acts autonomously. So you could have a corporation that has plenty of shareholders but no bosses. Or plenty of employees, but no bosses. Or no employees, no shareholders and no bosses and operates on itself…
A lot of people would think about autonomous organizations that do malice. But I like to think of it, in terms of, what about building a decentralized altruistic organization like a decentralized charity, a charity that collects charitable, giving donations in cryptocurrency and then, in response to activities that happen in the world, for example, noticing keywords about earthquakes and tsunamis in particular regions, then distributes these charitable donations directly to people who are in that country perhaps by saying, ‘Show me a geo location on your phone that proves you’re currently in the disaster zone and I will send you a small amount to help you out. And then you’d have 100% of all donations go directly to charitable uses. Zero operating costs. Zero people in the middle to take advantage. Complete transparency, open books. And you could have an autonomous charity with no humans involved. Bizarre, I know, but this is within our future.”
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