Blockchain, Cryptocurrencies, Banknotes and Chopped-up Databases

The Blockchain Academy brings us news about the apparent differences between banknotes and cryptocurrencies.

In their previous article, A Freestyle Interpretation of Money, they argued that -from a value point of view- the form under which money exists is not that important, but that its scarcity is. Now, they talk about “form”.

Let’s have a look at the form of banknotes and the form of a random cryptocurrency

Visually, the form of a banknote is … well … a banknote: a piece of paper on which is written a nominal value and a unique identifier number. Additionally, security measures are added in order to become uncopyable.

The form of a cryptocurrency, on the other hand, is kind of weird: it’s just a line of data in a database, indicating the sender and the receiver, a nominal value and a unique identifier number. Additionally, security measures are added in order to become uncopyable.

Seems like we just wrote twice almost the same thing in describing the form of a banknote and the form of a cryptocurrency. Let’s repeat: “… nominal value and a unique identifier number. Additionally, security measures are added in order to become uncopyable”.

Thus what are the differences? Well, there is 1) the support, i.e. paper for banknotes and a digital database for cryptos. And 2) the absence of the indication of a sender and a receiver on the banknote.

Mmmm … interesting. Let’s try to reconcile them.

Let’s take all the banknotes of a nation, let’s take some adhesive tape and let’s stick them together to a long list of banknotes. As a result, we kind of created a database in which each banknote represents a line in the database.

On the other hand, let’s print the cryptocurrency database, let’s remove the sender and receiver references, let’s take a pair of scissors and let’s cut out the most recent transaction lines for each cryptocurrency unit. Well, we kind of created banknotes from a cryptocurrency-database.

Conclusion? In their essence, banknotes and lines in a cryptocurrency-database are very much the same!

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