The Tale of Terra(Continued)
Terra is thriving, enjoying a life that is fulfilling and secure. Her health has improved, she has acquired literacy, and she is finally happy. To top it off, Terra has made a real-world friend who is a native Australian, with whom she converses, plays, and does everything in English. For Mr. Wilson, this achievement is very rewarding. He has dedicated day and night to work on improving Terra’s quality of life. His research is finally paying off. He feels like taking a step back for some time from his work and his “homework”. Despite everything, Mr. Wilson feels compelled to reach out to his old estranged friend James, whom he hasn't spoken to in almost a year. However, he feels guilty for taking time off from his work and his daughter's needs. He feels the need to be constantly working on earning to provide quality for Terra and also researching to help Terra in every way possible. Nevertheless, he contacts James, and they have a reunion after a long time. Surprisingly, Mr. Wilson hasn’t shared his ordeal with James yet, and James is unaware that his good friend even has a daughter. The two of them go way back to their university days, where Mr. Wilson was studying engineering and physics, while James was studying biotechnology. James left his biotechnology degree to explore deeper questions and solve tougher problems in philosophy. James was the Sherlock to Mr Wilson’s Dr Watson. Now a successful author, he has written books on all philosophical concepts, from altruism to ethics and epistemology. His best-selling book, "The 10 Commandments to not becoming an egoist," is a classic self-help guide on living life responsibly and equitably, if not altruistically. Whenever James is writing a book, he drives out to his family vineyard in the Adelaide hills, which has a beautiful secluded cottage. When Mr Wilson contacted James he was out in the Adelaide hills, so Mr Wilson took the first flight to Adelaide and after an hour’s ride out from the Adelaide airport he reached James’s “Earl’s Winehouse” with the nostalgia of the good ol’ days setting in. James’s ancestors came to Australia during the British colonization of South Australia. During this period, James’s ancestors built this beautiful vineyard for themselves with a jaw dropping Scottish castle with Irish elements as a winter house. They decided to make Adelaide their home and never went back. Since then, the Earl’s Winehouse has been in their family with the vineyard producing one of the most expensive blends in the world. When Dr Watson reached Sherlock, they did their favorite thing running after the big questions together.
Well, you know Sherlock is Sherlock and he does what he does best, detects. He detects some sense of depression within his Dr Watson, he figures out there is something else on Dr Watson’s mind. Sherlock takes out his pipe and puts on his magnifying glass in a sarcastic way and asks his Dr Watson to spill his guts. Mr Wilson tells James about everything and how their past year has passed. Mr Wilson then realizes through explaining his ordeal that James should have been the first person he should have talked to and not the last on this matter. A biotechnologist and a philosopher to help solve his problems.
What better could he possibly want?
The two of them started exploring ways to solve Wilson’s problem. First challenge being getting money to afford some really expensive trials and treatments. Well, Sherlock here offered to pay money for Terra’s treatment which Dr Watson out of his honor could not accept. He would not take money in any form: loan or otherwise. They thought of crowdfunding to raise funds but it was way too simplistic for 221B Baker Street, London.
They thought of everything from insurance loopholes to government loopholes even to legal loopholes to do frowned upon things.
That’s when they thought of something brilliant! Something out of this world! Something that could raise potentially millions of dollars for them with which they could provide Terra an amazing shot at beating HIV. Nightlong, the two of them kept working on this concept. They drove out from the cottage to the city to get materials for a cooling system for their servers. They had to plan it very swiftly and silently. It was something that needed to be launched very systematically and strategically for them to reap the maximum benefits out of it. They had just stumbled onto something really big. If they executed it properly, they could solve one of the biggest problems for Dr Watson. All they used was the Socratic method!
They created their solution and laid its foundation. Completed a public release for the same and a white paper to show how their concept worked. Within 3 days, the duo were ready with an out of this world invention. They published the paper under a pseudonym for it to create a sense of mystery and ignite interest in people.
Their assumed pseudonym was “Satoshi Nakamoto”!
If you know who that is, Satoshi Nakamoto is the anonymous inventor of one of the most disruptive technologies: Bitcoin!
By creating bitcoin and laying the genesis of the first block of this blockchain and subsequently releasing this mysterious paper to the public, there will be sudden popularity of Bitcoin and people will invest suddenly. If Mr. Wilson buys the tokens of this cryptocurrency created by him initially which costs very less, then after it has become popular, he will own assets worth millions which he can exchange for fiat currency and pay for his daughter’s treatment.
World of/with Cryptocurrency
I assume you know the basic workings of Bitcoin. We still don’t know who Satoshi Nakamoto is but one thing is for sure, he had to have an ulterior motive of need such as this one to have invented this technology, he is someone who has stayed anonymous till date which means he still might have significant holdings in Bitcoin. Since, it’s all anonymous there is no way to know!
Bitcoin and blockchain has some really interesting and potentially world changing applications in various aspects, specifically the technology on which bitcoin is based “Blockchain”!
You may have your own preconceptions and opinions about cryptocurrencies and blockchain technology, and I have mine. Some may view Bitcoin as an insecure financial asset with fraudulent elements, while others may see it as a completely safe and promising investment. However, I want to clarify one thing: you can either work against Bitcoin or work with it. Its decentralized nature makes it challenging for a centralized authority to regulate or shut down, which means that it will continue to evolve and grow. Rather than opposing it, we should educate ourselves and develop policies that align with it, both personally and publicly.
Bitcoin has proven to be the goose that layed a golden egg for numerous people. It has provided employment and opportunities to a significant proportion of people. On the other hand, though, it has also caused trouble to a lot of people. It’s volatility makes it prone to manipulation. If some people make money in currency from cryptocurrency well that has to come from somewhere, it can’t magically appear out of thin air. That money comes from people who buy crypto at the maxima or the high point, after which they lose their money at a low point.
While there are instances of individuals with insider knowledge profiting at the expense of those who are not aware, this is not a reason to dismiss cryptocurrency altogether. In today's world, information is power, and those who are knowledgeable about the market stand to gain significant profits. For example, when Elon Musk changed Twitter's logo to Dogecoin's logo, the value of Dogecoin increased by over 30%, resulting in significant gains for those who were aware of the change and had invested in Dogecoin. Those at twitter privy to such a change in logo and even Musk himself, had they invested in Doge stand to gain tremendously due to the increase in valuation.
This manipulation of cryptocurrency is similar to stock market manipulation, but there is no centralized authority to prevent it. This lack of regulation and transparency is causing a lack of trust among the general public, which is a major aspect in fintech and financial transactions. Cryptocurrency is created out of thin air, which makes it difficult for people to trust it. In contrast, the US dollar relies on the trust of the US government.
However, cryptocurrency has some advantages over traditional currency, as it can be recession-proof and protect individuals from inflation. Bitcoin, for instance, is controlled by a strict computer code that releases a set number of coins regularly, while traditional currency is controlled by the market and people, leading to inflation and volatility. While cryptocurrency is externally volatile, it is not internally volatile, unlike traditional currency, which is volatile in both aspects but to a lesser magnitude. Today, cryptocurrency is an intermediary to currency, just as currency is an intermediary to goods.
Financial institutions are built on trust, and as a result, it is unlikely that cryptocurrency will replace traditional currency in the near future, especially for older generations who have grown up in an era of traditional financial institutions and may be less flexible. However, some experts believe that cryptocurrency may eventually replace traditional institutions, which could pose a significant threat. One of the biggest threats posed by cryptocurrency is its decentralized nature. If commerce becomes decentralized to such an extent, taxation would be very difficult, as taxes are typically levied when there is a transfer of funds and commerce. In this case, there is no proof of a transaction, and both transactors have anonymous identities on the blockchain. This makes it difficult for the government to track who pays who, which could cause institutions to operate without sufficient funds. This possibility is quite dystopian, and it is likely that the government will take measures to prevent it. However, as the dominance of cryptocurrency continues to increase, the government may still fall short of the money it needs to afford its expenses. In such a case, the government may have to increase the costs of essential services that it regulates, such as healthcare, which could alienate poorer segments of society. Overall, the future of cryptocurrency and its potential impact on traditional financial institutions and government regulation is uncertain, and it will require careful consideration and planning to ensure that it is effectively integrated into our financial systems.
Cryptocurrency is being heavily used in money laundering and trafficking. Transactions and identities are so untraceable that it has become a preferred way for people to launder money and basically transact for illegal activities. Around 23 billion US dollars were held last year in cryptocurrency in illicit funds, that’s almost equal to the US economy.
Cryptocurrency is kind of parallel to the drug economy in many senses.
Cryptocurrency is an aboveground parallel economy and the drug economy is an underground parallel economy.
Both kind of economies challenge the centralized economy of the country.
Both cryptocurrency and the drug economy are heavily decentralized. This amount of heavy decentralization results in anti-governance. Like the drug economy undermines the penetration of governance, similarly cryptocurrency undermines governance in many respects.
Blockchain maintains records that immutable and timestamped. Any confidential documents put up on blockchain will never be removed due to the decentralization, this undermines the power of the government to contain secrets and even clean up any leaked documents. Such documents will be publicly visible forever and will undermine the ability of the government to govern. Moreover, if the commerce is directed from cash currency to cryptocurrency it creates a parallel economy, making it difficult for the government to get taxes and govern.
Both the drug economy and cryptocurrency are internally non-volatile but externally highly volatile. In fact, studies suggest drug economy was the only thing that prevented a complete financial fall in the 2008 recession.
Both cryptocurrency and the drug economy have been tied to illicit activities such as money laundering, tax evasion, etc.
Both cryptocurrency and the drug economy have the select few powerful people managing the show, in case of drug economy that being the cartels while in cryptocurrency it being the influential and techno-savvy people.
Both transactions are anonymous and provide anonymity to the buyer as well the seller.
Both economies have power conflicts and power projection inherent.
Drug economy the power projection is between the cartels while in case of cryptocurrency it will be nations. Maximum crypto mining farms are in China and thus in a way China controls or holds power of trade in cryptocurrency, this will lead to significant attempts at power projection by China and an increment in its soft power. If China decides to launch a 51% attack or uses its majority or majority in the crypto mining farms as an asset in the sense that without China’s role, a lot of aboveground commerce that does take place will be crippled. Though at such a point in time, centralized currencies will exist, but the penetration of decentralized currencies and their sudden pause will result in hardships for people because they will have no ways to transact for goods and services.
It's also important to note, that blockchain will improve personal liberty and increase transparency in both good and bad ways. For instance, the FTX fraud by Sam Bankman-Fried is a classic example of how this level of decentralization allows for more scrutiny of the centralized institutions associated with decentralized cryptocurrencies. Current financial institutions can mask scams and frauds for a long period of time, for instance some of the largest financial scams in India ran for more than 5 years like the Nirav Modi case of the Vijay Malaya case but here FTX was founded back only in 2019 and by 2022, its scam was already unearthed.
FTX is a digital currency exchange that allows one to buy and sell cryptocurrencies. FTX had its own cryptocurrency too which was FTT. Alameda research was a company started by the founder of FTX Sam Bankman-Fried. Since FTT was publicly traded and well moreover, created by FTX, Alameda owned a decent share of FTT tokens. Alameda Research was taking loans in USD from FTX with FTT tokens it owned as collateral. Alameda in turn loaned money to the top officials of FTX. Indirectly and in short, the money was being systematically siphoned off. Many customers lost their money invested through the platform.
In other instances, blockchain can protect against censorship, in the sense that government lacking control of this technology will not be able to control the kind of information on it. Though, we must ensure, this nature of blockchain isn’t unethically used for confidential and classified documents which undermine the government’s ability to protect itself.
Crypto mining is a computationally expensive task which takes up a lot of energy, resources and cooling resources. This causes tremendous pollution. The decentralized nature requires many crypto mining farms, this amounts to 0.1% of all global greenhouse emissions. Moreover, this distributed ledger system and the proof of work computations are extremely energy consuming and for what, well a lot of the resources that go into proof of work computations are totally redundant. A large proportion of the pollution caused is also redundant and purposeless.
There is another crucial threat posed by this distributed ledger system. Most of our conventional encryptions today use the RSA encryption which relies on the product of two prime numbers. Non-technically speaking, in order to break RSA encryption using conventional system it would take a computer 300 trillion years. Quantum computers are set to reduce this time to 104 days. The reason quantum computers can do is due to the fact that the states can exist in superposition, non-technically it has greater computation which a classical computer cannot match, but a multitude of classical computers can. The blockchain network or the distributed ledger system has the potential to be one large supercomputer due to the distributed computing capability. While this distributed computing through blockchain can have positive impacts, it can certainly pose negative threats in terms of network securities and collective increased computing power for illicit purposes as well.
Having, discussed all this, progress of blockchain and cryptocurrencies can still not be rooted out therefore we must shape the progress and the technologies according to us rather than putting dents in ourselves trying to slow or stop its progress.
Policy recommendations
Countries globally should open up their own crypto mining farms. It’s quite certain that many governments will have already done this and undertaken measures to achieve so. If we have globally distributed mining farms in this fashion neither private individuals nor single governments will be able to control and project power through cryptocurrency. Only a coalition of countries will be able to launch a 51% attack on blockchain. This introduces a certain level of regulation and centralization in crypto space. This also allows the government to protect against the state of a parallel economy in the running that is aboveground yet illegitimate. It also introduces sources of revenue for the government in event of reduction in tax collection due to diversion of commerce to cryptocurrencies. Centralising crypto farms will help with pollution as well, because then strict conditions and efficient technology use can be imposed.
Cryptocurrency scams cannot take place overnight, large transfers will raise eyebrows almost instantaneously due to the transparent nature of blockchain. A coalition of elite individuals involved in web3 should regularly monitor the blockchain for discrepancies. This would be synonymous to community policing, where the community itself will police the blockchain and itself will take necessary measures like vigilante justice.
Another probable aspect can be to legalize bank issued cryptocurrency in all its shapes and forms, this way monitoring and security will automatically increase. Criminal activities on cryptocurrencies are kind of because its like the forbidden fruit, removing that element will reduce criminal activities greatly.
For the common people, crypto trading and investments are through intermediaries and exchanges. These exchanges should be put up to a high level of scrutiny and monitoring to prevent the FTX scam.
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