With ordinary money like cash or coins, the holder decides what they want to do with it and what needs to be disclosed. Programmable currency is an entirely different situation. In many ways, they aren’t much of a deviation from existing digital currency that can be tracked, blocked and controlled. The differences lie in scale, scope, and application. When someone has their donations seized, or their bank account frozen, there is an action that needs to make that happen. Someone has to recognize an event, then take action and make the change.
With programmable currency intervention can be the default. Instead of you being protected from interference, you are at the whims of the rules of the game. Ideally, people would be able to choose the terms they’re beholden to. The challenge is that both state and corporate entities are more than able and willing to enforce one-sided terms onto the public. There is much to say about the diabolical uses for programmable currency.
What is it good for?
Currency is a concept first and foremost. Instead of getting lost in the technical details of specific digital currencies, realize that programmable currency can be built on simple ideas. This piece, aims to help you understand how these systems work. Surely there’s more to programmable currency than pure evil? What can programmable currency be used for?
There are many situations where one may want some product or service, but isn’t too concerned about who or what provides it. With programmable currency one could automatically pay the first entity that delivers it. Even fully-centralized programmable money may provide the mechanism for ordinary people to setup these kinds of interactions.
This has all kinds of other uses. With this, and a high degree of automation; one could run a nearly entirely automated business. When a customer places an order, the machines detect the transaction. The machines then can prepare the order, maybe even paying human laborers in the programmable currency to handle some of the trickier parts along the way.
Kevin McKernan argues that the peer review system is broken. That its main flaw is the lack of a price signal for reviewers. Funded by the Dash project, Kevin published results and papers about sequencing cannabis plants. Through the course of the project a great deal of progress was made. He does focus more on the scientific elements of the project, but some elements are clear:
- Science could be a lot more transparent
- The barrier to entry can be lowered significantly
- Participants can be better rewarded for their contributions
Alternative financial models
Many proponents of programmable currency are fierce advocates of universal basic income (UBI). Cesium is an attempt to make this a reality. Every day each participant in the web-of-trust is given a daily guaranteed dividend. The value of the currency is solely determined by the value offered by the participants. This currency isn’t designed for saving or investing, but purely as a way to provide grassroots liquidity.
A trivial example
If you’ve ever tried a variety of games for Android or iOS, this can illuminate things a great deal. Many smartphone games are outright designed to extract the most amount of money from the customer as regularly as possible. With all the state-of-the-art research on how to manipulate people, any centralized digital currency will definitely resemble the worst aspects of any popular mobile game.
As a player of any mobile game you bring in two primary resources: your money and your time. Your goal is to effectively convert one or both of those resources into in-game experiences and rewards. These mobile games tend to have two in-game currencies: one that is purchased with time, another that is purchased with your money. If you understand those dynamics, you understand everything you need to about how programmable currency will be used against people.
The game’s two currencies have many properties that are unique to programmable currencies:
They are limited to specific uses
In these games the currencies are not equal. “Money currency” will take you so much farther than the “time currency’ and there is usually a very unfavorable ratio when exchanging these.
May be explicitly manipulated by the issuer
The player doesn’t have any control over the game’s infrastructure. Their only choice is to use the currencies as intended or work outside the system entirely.
Purchasing the currency locks you into the system
There may be no way to recover value from the system. If the game itself is not one you enjoy, and you’re outside of the refund window, there may be no way to recover the value you put into the system. It may even be outright impossible.
What can’t programmable currency do?
Eliminate security concerns
There are many examples of poorly designed Web3 projects getting hacked or having funds sanctioned. These systems aren’t immune to all the same failings that existing digital infrastructure has. Like any other endeavor great care should be placed in ensuring the privacy, security and autonomy of participants. Just like with any other kind of app, convenience can come at a price.
It is all-too-appealing for those of us interested in technology to believe in our hubris, that simply the right technological innovation will overcome human problems. It can’t be overstated that this mindset will always lead to mistakes. Tools are tools, whether they are wielded by us or the technocracy. “Trust-less” systems can’t bring health and wealth to a society of people who don’t respect each other.