Weekly SmartPills #12

"THE BLOCKCHAIN: A JOURNEY TO THE ISLAND OF YAP AND THE FUTURE OF TRANSACTIONS" INTRODUCTION:

Explaining blockchain may seem like a daunting task, but we want to introduce this complex technology with a fascinating story. When we first ventured into the world of blockchain, we relied on the knowledge of an industry expert, Christian Ferri, who provided us with an in-depth view of this innovative universe. His book begins with an intriguing story: the Island of Yap.

The Island of Yap and the Rai Stones

The Island of Yap, one of the Federated States of Micronesia, holds a fascinating secret related to its currency. The "Rai Stones" are limestone discs of varying sizes that served as currency on the island. Some of these stones could weigh up to 4 tons and were transported with canoes and rafts from the nearby island of Palau. Their value was determined not only by their size but also by the history surrounding them. For example, if they had been transported with great effort or were linked to notable figures, the value of the stones would increase.

The Solid System of Transitions

Despite their imposing size, the stones remained in place during transactions. This might seem like an obstacle to the modern concept of money, but in reality, it was a solid system that relied on the entire community. Transactions occurred publicly through verbal declarations, and the whole community acted as the custodian of property and transactions. It was a system based on consensus and widespread trust.

The Evolution of the Concept of Money

Over time, the concept of money has changed. From the Gold Standard, where money could be converted into gold, we moved to the fiat currency system, where the value of money is determined by central banks and is based on trust. Banknotes became simple credits against the central state. But blockchain brings us back to the system of the Island of Yap, emphasizing consensus and widespread trust. Moreover, blockchain solves the "double-spending" problem, which is the possibility of spending the same money more than once.

Blockchain is not just a cryptocurrency, but represents a revolution in the way we manage transactions. It is based on widespread trust and consensus, bringing us back to a system similar to the Rai Stones of the Island of Yap. In the next article, we will further explore the world of blockchain and its impact on financial transactions.