The effect of new technologies are difficult to understand. I think we’re still learning a lot about how social media influences the world today, which is an extension of how the internet affects us – both of which might not seem that new to us. Today, some of the newest topics we’re discussing are blockchain, artificial intelligence, and robotics. We as a society agonize over the impact of these technologies.
When trying to understand something new, it’s a good exercise to think of ways that it’s not new – specifically, look for something that’s been around for a while with lots of parallels.
Let’s take Bitcoin as an example, what is it similar to? One example I can think of is the Gold Standard. They’re clearly very different, but there are some similarities:
– Both tie government issued currency to the value of something not (directly) controlled by one government.
– Both are only as valuable as we consider it to be.
– Both have a limited supply.
– Both can be “mined” by those with enough of the appropriate resources and know-how.
Based on this exercise, what are some theories we can come up with on the effect of Bitcoin?
– It won’t replace government issued currency.
– It will continue to have value that fluctuates.
Looking at the differences, for example one being digital while the other is not, we can already see today how Bitcoin could be accepted as currency at most merchants while Gold cannot (or at least not easily). This may or may not affect our previous theories. What do you think and why?
All of the above is clearly oversimplification, but I present this method merely as a thought exercise.