Changing ‘change’ – Short history of that change in your pocket.

I’ve been hearing about Bitcoin a lot lately and when I learnt how Bitcoins were ‘mined’, it reminded me of how societies change what they value and the concept of money changes with that.

Civilizations value what they deem is the most important and the worth of anything, either a hard day’s labor or a exquisite piece of art is valued with respect to that commodity. The ancients valued food or sustenance above all and long before the great cities rose people were trading using food the grew, meat or hunted. Thus the barter system was born. Slowly as people started settling in agricultural societies started valuing their staple diets more and more, and nomadic communities their herds of cattle.  No sooner, the worth of a man was measured either by the sacks of rice or a the herds of sheep he had.

GOLD!

GOLD!

When the first man saw the bright sunlight gleaming on the yellow metal the history of mankind was forever changed. Cities fell, civilizations wiped out and ordinary humans became gods in the eyes of the beholder, all because of the shiny pieces of gold  they had. Soon precious metals were considered valuable and coins were minted with gold and silver to be used as currencies. These coins had intrinsic value, irrespective of who minted these coins, they were valuable for the materials in which they were made from. This sparked the global trade to flourish in a much wider scale. Although people did not want the commodities you were selling, everybody loved gold!

But carrying something like gold which had intrinsic value had its disadvantages, you were vulnerable to robbery and theft and you could carry only so much and not weighed down by it. So, some renowned trade houses started offering promissory notes that you indeed possessed the amount of gold that was written on that piece of parchment. It was safer now to travel with all your wealth in your pocket. You could exchange the note for the gold at any franchise of the trading house or you could directly trade using the promissory note. Thus the first currency was born. This was a very successful endeavor indeed, some promissory notes issued by large trading houses in India were so popular that they were valued as far as Mesopotamia and Egypt  Even kings did not posses that much influence. Empires rose and fall, dynasties perished, armies clashed but trading houses and conglomerates survived Millenniums.

Gold seemed to be the perfect currency, it seemed flawless but now we know that it also reacts to the forces of demand and supply. When the time of kings and tyrants had passed, governments rose. One centralized authority that promised that it could and would protect your life’s work; the first gold backed currencies were born. Now, these currencies were backed by gold or other precious commodity which the government held in huge lockers in undisclosed locations and printed currencies equal to the value of the commodity that the country possessed.

Thousand rupee note - India

Thousand rupee note – India

Once the evolutionary urge of survival is not necessary anymore, the second most powerful urge, the urge to reproduce kicks in. Humanity grew in an explosive rate.  The number of people kept growing in an exponential pace but the amount of precious metal remained the same. The move away from commodity backed currency was inevitable. Governments started printing money. Neither did this type of money have any intrinsic value nor was it backed by any commodity, it had value because governments said so. This type of money is called Fiat money. This type of currency has value because people say it has value, funny isn’t it? This is called the Tinkerbell effect, something exists or is valuable because people believe that it does! From the salary you are paid to the country’s economy to international trade depends on the one single basic fact that people and governments are trustworthy; ironic isn’t it? That government, which is run by “corrupt” politicians and executives, that we sometimes hate and bitch about is the single  thing that is holding your sh*t together! When you read “I promise to pay the bearer the sum of…” on that bank note, it really is just a promise.

When governments like that are afraid of something then you can bet your money that it is indeed powerful. Yes, I am talking about the internet. It has transcended country, religion and racial lines. It has elected presidents and overthrown dictators. So, when the internet democratizes the playing field, it does not stop for anything. You might have heard this before but Bitcoin which is the currency of the internet has no centralized authority. It is a peer to peer currency that exists on the world wide web. Bitcoin is “Mined” by performing complex calculations using powerful systems. That’s right, Calculation are turned into currency. When the world moves into the new digital age, not commodities, not governments but the power of calculation and intelligence will hold the key.

Bitcoin

Bitcoin

The internet is not some artificial hive mind, it is a network of people and people are unpredictable. This also translates to Bitcoin, but it clearly shows us what has become the valuable commodity of this digital age. Even if it does not become the standard currency it has ushered  us into a new age and has changed our perspectives.

More on Bitcoin here.

Advertisements

I want to believe again!

I am a great fan of Jawaharlal Nehru, he was India’s first prime minister, a die-hard nationalist and an atheist. While I was reading his ‘The Discovery of India‘ something caught my eye.

disc

Now, this requires some context. This was around 1935 when the British had passed the ‘Government of India Act‘, which put in place ministers from the Indian National Congress in some positions of power but still under the oppressive reign of British Governors and the Viceroy. These were the days when they fought against the tyrannical rule of imperialism, people bled for democracy and freedom. The whole nation believed that Democracy can change their fate; they believed in Leaders; they believed it was the answer. In a country of hundred religions, where people killed each other in the name of god, an atheist became the first democratically elected Prime Minister! That was the respect and devotion that people had for politicians and politics.

What happened?

Populist politics, Caste vote, violent coercion of voters, instigation of religious riots, walkouts from the parliament sessions which is paid for by taxes, corruption, scams and things that on mention makes you shudder in disgust;  I’ve spent the larger part of my life in the 21st century and all this seems too familiar now , a very sad realization indeed. When was the last time you heard an intelligent and educated youth talk good about politics? The mere mention of the word brings a feeling of repugnance to the listener. Why has this happened? Why wouldn’t this happen? I’ve never known a politician whom i can adore, whose honor i am willing to defend.

Indian-Democracy-Political-Cartoon-Gandhi-08_04

I am deeply disturbed and saddened by this. We don’t understand the domino effect of this disbelief. The general contempt and aversion that the people hold towards the politicians echo across the spectrum of governance. People trust NGOs more that the governments they voted for; and when the faith in the government falls, people’s faith in the currency falls, people even stop exercising their right to vote. People lose faith in democracy! It is easy to be is heartened and to become a cynic; and as of now we are not short of reasons to lose hope.

young_girl_20080124I love this country and its people, I want us to do great things. I want a politician who defies the current meaning of the word. I want somebody to love and trust. I want a secular non-partisan idealist. I want to believe that the government is good again. I want to be a nationalist. Give me hope!

I wanna believe in democracy again!

I want to be a Patriot!

What is Democracy NOT – Disillusioning Indian democracy

Our dreams cannot fit in their ballot boxes

Our dreams cannot fit in their ballot boxes

If I have to put all that I am going to say in one simple sentence, it is that democracy is not all that you think it is. In principle, democracy is the rule of the people and that is true but only partly. If we literally let general consensus and collective conscience rule then it will not be the rule of law, it will be anarchy.

If we let emotions rule over us and go to war on a whim and give our nuke launch codes to the media, that is not an effective and wise democracy. Although it is a grave crime to tarnish the modesty of women, if we let lynch mobs to castrate and kill the accused, that is not democracy. If we name and shame every allegedly corrupt person in the country without investigating further, that is not democracy. Democracy is doing the right thing even If you face the ire of the people.

Democracy is your mom not giving you candy because she is afraid that it will ruin your teeth in the long run. Democracy is the one who protects the minority from the bullies although you cry foul that it is not fair treatment and equality. Democracy is your dad giving you an ass whooping if you riot on the streets. Democracy increases the fuel prices and lets you taste the reality even if it pinches your pockets.

Democracy exports food grains to foreign markets and even lets it rot in storage although it’s own people are dying of hunger. In a country where not the government nor the people but the constitution is supreme, democracy tells you that the law which you want to pass is unconstitutional and cannot be done even if thousands of people peacefully protest for it. Democracy is that thing which refuses to repel draconian laws that literally kill people even if they go on hunger strike for months and years together.

Democracy is a really bad parent, most of the time like a typical parent, it doesn’t even listen to what we say, it does what it thinks is the best for us. Sometimes they listen to big corporations and forget the little guy. In times like these it is up to us to give democracy ‘a talking to’.

Sometimes democracy lets a dictator take over! But it rises from it is ashes and makes sure that it doesn’t happen another time. Democracy looks out for me in the long run. In spite of me being ungrateful, it builds schools and universities so that I can get an education, it builds hospitals if I get sick, it gives me public transportation for me to loiter around and much more.

In all fairness, democracy is not rosy and comfy all the time, sometimes it can be a little prick. It is not a perfect system, in fact no system is, and like us, it evolves every day. Democracy is that awkward teenager who is going through eternal puberty. But the fact that democracy lets me say what I want (as long as it is not intent on hurting sentiments of people), protects my right and is willing to change, it gives me hope, and hope is a good thing.