Our Town: Bitcoin, cryptocurrency and the world of tomorrow

Our Town: Bitcoin, cryptocurrency and the world of tomorrow

Just like beads and fur trading, coins and cash are fast becoming a thing of the past
Way back in 1972 Liza Minelli and Joel Grey were good enough to direct our attention to the importance of money as they sang “Money, money, money, money, money, money, and money makes the world go round” in the Oscar-winning film “Cabaret.”

In this scene, Liza would throw coins into her nicely revealed bosom and Joel would toss coins into his underwear as they sang “A mark, a yen, a buck or a pound is all that makes the world go round. That clinking, clanking sound can make the world go round.” Charming song but, alas, things like real coins that make real sounds as they jingle in your pocket or real cash that can be held and exchange for goods and services may soon become a thing of the past.

If you’re old and slow like me, you may not believe this but to prove to you what the future will be like, just take a trip to Seoul Korea and try to use cash when you buy a Starbucks. I assure you will be looked at as if you are from another century and will be politely told “Sorry, sir, we no longer accept cash. Please use your smart Phone or a credit card.”

Welcome to the brave new world of cryptocurrency where every monetary interaction is digitized, recorded and centralized into the brain of Big Brother.

In order to prepare you for what is surely to come, let me give you a crash course on cryptocurrency. Many believe that Bitcoin and cryptocurrency were started by an eccentric Japanese guy with the name Satoshi Takemoto back in 2008, but the process started long before that. Way back in the 1990s big banking and the National Security Agency were already establishing plans to create digital currency and were the first to use words like “electronic coins” and “digital wallets.”

At this point we have a whole new language in banking with words like Idioms of Use, Fungibility, Mining of Bitcoins, Black Chains, crypto hash and lightweight vs. full clients. And if all this sounds confusing, well you’re not alone. Warren Buffet admits he hesitates to get involved with Bitcoin investing because he does not understand this domain. This reminds me of the message a psychoanalyst gave me when I was in training and we discussed investing. He told me to only invest in companies whose products I used.

Bitcoin currency relates to something called the mining process. Now you may think this is like mining in the old days of the Gold Rush. We all love Jack London’s novel “Call of the Wild” where the protagonist and his trusted dog Buck were up in the Yukon mining for gold. But, forgive me if I misstate this process. Block chain mining for Bitcoins is an affair performed by a warehouse full of super computers, which are performing an accounting and regulatory function to insure the integrity of the process. Kind of like the bricks and the steel vaults in banks but not.

Whether we understand this new form of currency or not, it has arrived and probably it’s here to stay. About 43% of American men between 18 and 29 have invested in cryptocurrency and that’s a very good predictor of the future. None of this is old news. Everyone recalls the 1997 Academy Award winning movie “Good Will Hunting,” which marked the arrival of the both Matt Damon and Ben Affleck and also starred Robin Williams.

It was a sweet film about a young underachieving janitor employed by MIT who solved a blackboard math problem that none of MIT students could solve. This blue collar genius impressed the MIT math professor sufficiently that he offered him employment. What most do not remember was that the employment opportunity was with the National Securities Agency to work on encryption algorithms and code breaking to be used in their new cryptocurrency project.

Some say that Bitcoin and cryptocurrency is like a religion in that you either believe in it or do not. Perhaps Warren Buffet is still a non-believer and whether that analogy is valid or not, Bitcoin and cryptocurrency are here to stay. This is the way progress works and  progress is unstoppable. Just like pay phones disappeared and gave way to cell phones, which gave way to smart phones.

In 1,000 BC, people used bartering but by 700 BC in China, coins were minted as a quicker means of exchange and then came banknotes and paper money. Manhattan Island was sold, purchased with $24 worth of beads and trinkets. And all of this finally led to Bitcoins. The irony is that one of the attractions of cryptocurrency is that it is currency with no centralized control by banking or government. It is supposed to be Anonymous Electronic Cash as per a white paper by the NSA in 1996. But the fact that the NSA wrote this paper makes one wonder if Bitcoin is not the penultimate entrance into surveillance society.

My biggest concern, however, is how Bitcoin will affect the film industry. With the disappearance of cash will come the disappearance of all those great heist flicks that center on the theft of cash. Remember film classics like “Heat” with Robert DeNiro, “The Italian Job “ with Mark Wahlberg, “Dog Day Afternoon” with Al Pacino, “The Town” starring Ben Affleck and “Bonnie and Clyde” with Faye Dunaway and Warren Beatty. These will never happen again.

OK, we will still have war films with Arnold “The Terminator” Schwarzenegger or Tom Cruise, but these guys are getting old. We will still have romantic comedies using Jennifer Aniston, Ben Stiller or Owen Wilson, but that’s about it. Who could have ever predicted that the coming of Bitcoin would create a crisis of creativity for the film industry? Perhaps they will do a sequel to “Cabaret” with a song called “Digital” and lyrics that go
“Digital makes the world go around, the world go around the world go around, digital makes the world go around, of that its plan to see.”

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