Cyber Currency – part 5/5 – Summary

SUMMARY

  • A Market example: (our friendly neighborhood farmers market)
    • Barter – direct exchange of goods works well at a small scale, but has limits
      • Limited to a specific time and place
      • No means for deferred payments
      • Dividing some items is difficult or impossible
      • No means for storing value
  • Market example: we decide to create our own fiat currency
    • Everybody in the neighborhood brings in their Monopoly money from the game
      • We now have an exchange currenty
      • But it’s too easy to counterfeit
      • We realize a need to secure the currency
      • We stamp serial numbers on all the Monopoly money
      • We decide to keep a journal of transactions
  • Market example: we decide to create our own cyber currency
    • Cyber coin
      • We issue our own cyber coin with our own logo
      • We create a mining group to produce a blockchain
  • Trust
    • Used to be supplied by value anchors (gold, silver)
    • Fiat money is anchored by national economies
    • Cyber currency is anchored by cryptographic work and a distributed ledger
  • Cryptographic journal
    • Publicly distributed to everybody
    • Tamper proof (cryptographic)

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