As an expert guitarist, I'm immersed in a continuing debate about technology. We guitarists debate a large number of little issues in online forums, on Facebook and in person. What strings provide the most effective affordability? Are U.S.-made guitars still superior to those manufactured in Mexico? Which "stomp-box" will make me sound exactly like Jimi Hendrix? You name the problem, there'll be multiple opinions, all held passionately.
But there's one overarching divide involving the "purists" and the rest. I maintain that it's preferable to own several guitars and amplifiers to obtain different sounds - one rig for blues, another for jazz, one more for country, and so on. The modernists say you can just use any old guitar and amp plus a fancy bit of digital "modelling" equipment that'll make sure they are sound like whatever you want.blockchain technology
Over and over again I've done shows with such "modern" players, only to watch in amusement as their fancy digital toolkit broke down, leaving them stranded. My old-fashioned Fender Telecaster and Deluxe Reverb amp then steal the show. There's a profound lesson in there... one which you must take to heart as it pertains to your money.
What If the Power Goes Off?
The modern world is just a kaleidoscope of electronic gadgets and systems which make possible things we simply dreamed about as kids. Thanks to your electronic world, you can buy a house from your cellphone, see what the night sky looks like in real-time on the other side of the planet, or profit from nanosecond differences in trading times in the stock market. All when you get out of bed. The same as my "modern" guitar friends, lots of people appear to bring it for granted that the digital systems that underlie these miracles - the Internet, like - are eternal. So when I hear someone make plans that assume uninterrupted connectivity, I think to myself: "What if the power goes off?"
Which brings me to 1 of the most frightening ideas I've encounter in a while.
A U.S. tech giant is reportedly taking care of a pc software platform based on the infamous digital currency "Bitcoin." The theory is to produce it easy for major currencies like the dollar or euro to use like Bitcoins. Anyone could transact with someone else on the planet directly, bypassing banks completely. Just log on, send your cash and you're done.blockchainsoftware
This promises a world without any banks, no fees and no hassles... but lots of danger.
Everyone knows that counterfeiting is just a risk with paper money. This is exactly why individual bills have serial numbers on them. But the same applies to digital currencies. Unlike physical money, the electronic files that represent digital currency can be duplicated exactly, without any trace. Since spending a digital dollar doesn't delete the electronic data that represents it, and in the absence of banks and their accounting systems, various other way is needed to prevent that dollar from getting used again by the same person - so-called "double-spending."
Bitcoin accomplishes this in the form of a "block chain." Every few minutes, a small grouping of all recent Bitcoin transactions is created, called a block. This block is then quickly distributed throughout the Bitcoin system, where it is put into the ongoing chain of Bitcoin transactions (hence the name). That way, if someone who has already spent confirmed Bitcoin (and hasn't received it back legitimately from a next party) tries to spend it again, the device will reject it as "counterfeit."
Bitcoin accomplishes this by using a distributed system of anonymous "nodes" that keep an eye on the block chain. But the same thing could be accomplished by a main server. The tech company working alone digital currency has therefore floated the thought of turning dollars and other currencies into digital form - with the central server controlled by central banks.
What Could Possibly Go Wrong?
I don't need to share with you what might happen under this system if the power goes out: No moolah. Needless to say, the same thing can and does happen now, with so much of our transacting done by credit or debit cards. But at the very least we have the choice of keeping and using cash.
Am I paranoid in thinking that, no matter what the features of digital currencies - and bypassing banks is really tempting - the true danger isn't power outages, but rather giving a main power the capacity to turn our money on and off? The dangers of digital currency aren't small. After all, imagine the opportunities for monetary mayhem: digital wealth confiscation... automatic taxation... courts issuing warrants to seize your digital money...