You might call it the cable that changed history.
In the mid-19th century, there were various attempts to lay cables across the Atlantic Ocean between Britain (Ireland) and the United States.
It took many failures, several bankruptcies and more than ten years before it was corrected.
But they eventually did, and on July 27, 1866, Queen Victoria broadcast a message to US President Johnson…
Money is a form of communication technology
Here is what the first transatlantic cable had to say:
Osborne, 27 July 1866
To the President of the United States, Washington
The Queen congratulates the President on the successful completion of a project which she hopes will serve as an additional bond of union between the United States and England.
Washington Executive Palace, July 30, 1866
To Her Majesty the Queen of the United Kingdom of Great Britain and Ireland
The President of the United States acknowledges with deep gratitude the receipt of Her Majesty’s message and warmly exchanges hope that the cable that now unites the Eastern and Western Hemispheres may serve to promote and sustain peace and friendship between the Governments of England and the Republic of the United States.
(Signed) Andrew Johnson
It may take ten days or more to send a message by ship; Now it was a matter of minutes. So someone came up with the slogan “two weeks to two minutes”.
Transfer speeds improved rapidly; Morse code became words and it soon became possible to send multiple messages simultaneously. By the end of the 19th century, Britain, France, Germany and the United States were all connected by cable.
Personal, business and political relationships have been changed at all times.
At the time gold was money of course, as were banknotes that represented gold. You cannot send gold by cable, nor by paper. But you can send a promise.
And within two weeks of receiving Queen Victoria’s letter, so did the two, who trusted each other. The exchange rate between the dollar and the pound was agreed upon and then published in the New York Times on August 10.
That is why, to this day, the GBP/USD exchange rate is known as “cable”.
My goal with this story is to make a point: What is money, but a form of communication?
Look at a £20 note (if you’re still using it) and you’ll see “I promise to pay the bearer”. Of course, promises disappear. gold does not. Both are completely different forms of money: one is faith and the other is real.
However, since the dawn of civilization, we use pronunciation money. In ancient Mesopotamia, people used clay symbols, representing sheep or barley, baked inside clay balls to record debts owed. They found it more effective to draw images of tokens in the mud for the same purpose, which is how the first writing system evolved.
In ancient China, people would write down their debts on bits of leather; After the invention of printing they began to use paper.
Today promises are recorded and exchanged between trusted third parties on computers.
Millions, possibly billions, of promises are sent across the internet every second, and they’re transmitted as fast as possible, perhaps even faster. Not only does (money) money evolve with communication technology, it is often the driver and catalyst for the development of communication technology.
Now Bitcoin, with its own blockchain, completely eliminates the need for trusted third parties – which is one of the many reasons why it is so special. Here is a financial communications network backed instead by mathematical proof and the most powerful and resilient computer network ever known to man: a trusted third party is the blockchain.
Why wouldn’t you want to own a share of this advanced technology? This, in effect, is what it means to own some bitcoin — to own shares in a new cash technology. And it’s not as if they’re making any retreat.
Money has evolved like language
I want to explore the idea of money as communication.
It is often said (by me at least) when thinking of politicians: Look at what they do, not what they say. What we do says more about us than we say – what we do with our money says more than that.
And what we do with our money communicates value, not just between seller and buyer, but across the economy. What is the price of this thing? What is its value? The answer is constantly sent, received, assimilated and acted upon; Likewise, the economy is constantly and gradually developing and evolving with each new sign: how, why, when, what needs to be produced and where.
Money, then, like language, is constantly evolving and changing. Nobody is really responsible – it was not really planned, it was constantly evolving. The architects of fiat money did not plan for what we have today, they only used it to get out of a tight financial situation – the extenuating circumstances of the time.
Likewise, no one planned the language we speak today. Language is hard to plan and organize, try it as many have done over the years – and you still do.
The English we speak today is a long way from the English of Chaucer, Shakespeare or Dickens. Maybe there are fewer words; Certainly fewer tenses. The rules are simpler. However, English is widely spoken. The network has grown.
Mandarin may have three or four times as many native speakers, but English is widely spoken. There may come a time when everyone in the world will speak up. It is the dominant linguistic network.
Meanwhile, other languages are fading out. Corniche gone. Few now speak Welsh or Gaelic. The local dialects of France and Italy are disappearing. Likewise, there is no doubt that a large number of African, Asian, and American languages are well on their way to disappearing, if they haven’t already.
The question to ask is: How scalable is the language? English has the potential to become the default language of the world. Although there are more native speakers, this is unlikely to be the case with Mandarin. This certainly wouldn’t happen to Gaelic, Neapolitan, or Swahili.
How many different currencies are there in history? Shells, whale teeth, metal, paper, cigarettes, mackerel packs, cognac, Zimbabwe dollar, Reichsmark, diamonds, brushes, shilling. Most of them died. It only goes gold.
But, as with transatlantic cable, you cannot send gold over the Internet. Only golden promises between trusted parties.
Bitcoin is money for the internet
The US dollar is the world’s reserve currency. You can submit it online. But it is difficult for non-US people to get US dollar bank accounts. Expensive foreign exchange fees. Funds transfers can sometimes take several days.
It is a national currency that is used internationally. A country—and many of them—could use it as a national currency, but it would also import U.S. monetary policy, thus subjecting itself to American political whims. This is why most countries with their own political agenda issue their own currencies.
Thus, despite being “international” as the national currency, the US dollar is restricted by its own national borders and policies. The same goes for any national currency.
But language is not limited to national borders – or at least English is not.
If there was only a borderless apolitical currency for the borderless economy and that was the Internet, it would really be scalable in a way that no national currency does. Network organically developed and constantly growing.
You don’t need a bank account to start using bitcoin. You only need a phone connected to the Internet. We’re not far from that point when everyone who wants one has one.
My argument is: if money is a language, then bitcoin is English. It has the ability to scale that no other currency has.
And no matter how quickly money developed – it is worth remembering that in the nineteenth century, the pound had greater worldwide recognition than the dollar. In emulation of Phileas Fogg by Jules Verne, who went Around the world in 80 daysIn 1889-1890, American journalist Nellie Bly went on a world tour in 72 days.
She earned pounds, but also brought in some dollars, “as a test to see if American money is known outside of America.” Heading east from New York, you didn’t see American money until Colombo, Sri Lanka, where $20 gold coins were used as jewelry. They accepted her dollars — but only at 60% off.
It’s kind of a question – though possible – to get people to accept bitcoin in the physical world. But this is not what it is. It is money for the Internet.
To find out more about this:
Beginners Guide to Bitcoin
Could Russian Sanctions Make the Dollar Less Attractive?
Dominic’s film, Adam Smith: Father of the Fringe, about the unlikely influence of the Father of Economics on the world’s greatest arts festival is Now available to watch on YouTube.