👩🏻‍💻 JustaskPenny 🖖
15 min readDec 3, 2018

⛓💸⚖️ The rise of a global decentralized digital world…and the future of money.

Payments, Blockchain, Cryptocurrency, Contemporary capital raising, new governance models & the new digital decentralized world…. The future of money is a world where trust is redefined as a decentralized network of computers so resilient and pervasive no one can tamper with it; where your local bank branch isn’t down the street, it’s in your pocket; where pennies from the crowd launch a thousand startups; where money moves frictionlessly across the globe; where your financial advisor is a piece of software; where crypto can create new types of abundance to drive our standard of living forward. Where computer science cryptography marries social science economics, driving accountability and trust between people.

🧐 Where do we begin 🤷🏻‍♀️… Let’s first begin with some context and terminology…

There have been earlier attempts at commercializing secure electronic cash, pre-dating bitcoin decades earlier. For example, David Chaum’s blinded transfer of e-cash (DigiCash), Wei Dai’s anonymous, distributed electronic cash system (B-money), various peer to peer payments such as PayPal, Nick Szabo’s proof-of-work system (B-gold), and of course HashCash which ran into processing power problems.

The blockchain revolution was officially triggered by the birth of Bitcoin, (a type of cryptocurrency and new generation of digital currency), and to many represents freedom and anonymity without controlling authorities, in an open public system, it’s the 1st use case application of its underlying technology known as Blockchain. It’s worth also emphasizing that Blockchain is just one type of Distributed Ledger Technology (DLT).

Bitcoin thus became the world’s 1st globally accessible public money, and the 1st public payments digital infrastructure. Public, in that it is available to all, without discrimination, and not owned by any single entity. Decentralizing trust, secured through cryptography. It works without the need of 3rd party intermediaries, an amazing computer science breakthrough. Removing choke points, single points of failure and vulnerabilities in infrastructure.

Intelligent humans take the initiative to be self-informed, to look beyond the shiny “crypto”-currency hype and glitzy surface as cryptocurrency is one piece of a bigger picture that is fundamentally changing our world across all sectors, evolving in the background for almost a decade.

Since we are here, I must also add that the term ‘Crypto’ has always been used to refer to cryptography. “Crypto” does not truly mean cryptocurrency, however, here we are… Actually, the cryptography in cryptocurrencies is “basic and simple” and plays “an ancillary role” and channels a false sense of security.

Distributed Ledger Technology (DLT): is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions.

CryptoCurrency: is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

What is a ledger?

We look back in history, around the 15th century when the Medici’s laid the foundations of banking and finance as we know it today. They pioneered the double-entry accounting practice based upon the equation of ‘Assets = Liabilities + Equity’ to manage the debits/credits i.e., deposits/withdrawals to track the influx of wealth from the merchant traders. Double-entry accounting gave rise to the Medici family in building their reputation for reliability and evolved to be the largest and most respected bank in Europe.

Since shipping large sums of money across countries was no longer practical, the Medici’s also pioneered the issuing of a “Letter of Credit”, an agreement in which the buyer’s bank guarantees to pay the seller’s bank at the time goods/services are delivered. They also introduced the concept of the “Holding Company” allowing them to develop the innovations of letters of credit and bills of exchange, hold deposits, make loans, solidifying their presence and trust across Europe, as global banks do today.

What is Blockchain?

The Term Blockchain means many things to many people, a complex technical and social phenomenon, challenging today’s definition and perception of currency, economics, trust, value, and exchange.

Blockchain captures the imagination and fascination of many having profound implications of technology.

  • To Developers it’s a set of protocols and encryption technologies for securing and storing data on the distributed network
  • To Business and Finance its a distributed ledger and the technology underlying the explosion of new digital currencies creating new financial instruments and overhauling outdated infrastructure
  • To Technologist its the driving force behind the next generation of the internet
  • To others, it’s the tool for radically reshaping society and economy driving the standard of living forward taking us into a more decentralised world driven by an abundance mindset

There are 3 types of blockchains:

  • Public Blockchain
  • Private Blockchain
  • Consortium or Federated Blockchain

It begins with Trust

For the 1st time in human history people everywhere can trust each other and transact within peer to peer networks without centralised management, challenging the status quo and relevance of middlemen fat cats.

Trust is established not by centralised institutions but by cryptography and computer code, this greatly strengthens our capability and collaboration between organisations and individuals within peer networks enabling us to potentially form global networks of collaboration without centralised formalised institutions. Unprecedented but hugely relevant in an age of globalisation and giving some light to tackle a whole new set of 21st century challenges requiring mass collaboration.

The importance of Consensus

Consensus enables the proper functioning of society, incl. ethics, contracting, legal enforcement, and many more..

Without a centralised authority or single leader, How are any decisions made?, How does anything get done?… “Consensus” is a dynamic way of reaching an agreement in a group.

A consensus protocol allows parties to reach an agreement in a distributed system, enabling an element of a trust-based system. The consensus behind the first blockchain, Bitcoin was Proof-Of-Work.

Common consensus algorithms include Proof-of-Work (PoW), Proof-of-Stake (PoS), Proof-of-Space(PoSpace), Delegated Proof-of-Stake (DPoS), Proof-of-Authority (PoA), and Proof-of-Importance (PoI). (Complete list of known consensus algorithms and examples will be explored in a later article)

In order to create a secure consensus protocol, it must be fault-tolerant.

Blockchains are decentralized ledgers, thus not controlled by a central authority. Due to the value stored in these ledgers, bad actors have huge economic incentives to try and cause faults.

This is best explained through solving the Byzantines Generals Problem.. a situation where involved parties must agree on a single strategy in order to avoid complete catastrophic failure, but where some of the involved parties may be corrupt and disseminating false information or are otherwise unreliable.

So the story begins… 2 armies of the same empire located on opposite sides of enemy territory want to attack the enemy city. The attack needs to be executed at the same time to succeed. The generals need to agree when to attack by sending a messenger through enemy city to co-ordinate the attack schedule. However, there is a risk that the messenger may be intercepted/replaced with a false message.

This is solved with the “Byzantine Fault Tolerance” system, the primary method the bitcoin network uses to generate chains of Hashcash style proof-of-work (or mining).

Instead of verifying between 2 players, the entire network of nodes verifies with each other to reach consensus. Essentially weeding out the bad players motivated to send false messages.

Decentralized Money

Money provides a universal store of value, that can be exchanged in society. Currency is “representative money,” that can be exchanged for a fixed amount of a commodity. The dollar fell into this category in the years following WW2, when central banks around the world could pay the U.S. government $35 for an ounce of gold. President Nixon was concerned about the gold supply and left the gold standard, leading up the dollar referred to as “fiat” money. It holds value simply because people have faith that other parties will accept it. “In God we trust”

Due to the global nature of trade, parties often need to acquire foreign currencies. Governments have two basic policy choices when it comes to managing this process, offering either

  1. a fixed exchange rate, where the government pegs its own currency to one of the major world currencies e.g., USD or EURO. The nation's central bank buys/sells the pegged currency in order to preserve the local exchange rate. Or,
  2. a floating exchange rate, where the price is dictated by the market supply and demand.

With fiat currency no longer backed by assets, there is a hazard of governments printing too much money causing hyperinflation. One of the role’s of central banks is to manage inflation.

The birth of Bitcoin (and other cryptocurrencies) means that for the very first time in world history, we now have a way to generate and distribute money without a central power, challenging the traditional role and relevance of central banks, intermediaries and agents and global organizations like the IMF, the WTO, and The World Bank, all ‘helping’ to give people control over their money (at a cost of course). Bitcoin became the 1st to turn theory into reality, and a promise to overhaul how we transfer value and costs associated I.e., printing, circulating, managing, trading and transferring currency.

A currency that represents freedom of speech under authoritarian regimes

According to the Human Rights Foundation, more than 50% of the world’s population lives under an authoritarian regime.

While cash remains one of the best ways to exercise free speech, it cannot be instantly transferred and poses a security issue for those holding cash.

For many under authoritarian regime, Bitcoin can be a valuable financial tool as a censorship-resistant medium of exchange. A hope for change and the liberating potential for freedom, especially where people have no way to reform the policies that have destroyed their economy and daunted by hyperinflation.

It has the potential to make a real difference for the 4 billion people who can’t trust their rulers or who can’t access the banking system.

How I came across this world

I’ve been following the rise of Blockchain and Cryptocurrency since Bitcoin’s inception ~ 2009 as it bubbled out of the 2008 GFC off the back of an interesting whitepaper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ published by a mysterious author Satoshi Nakamoto.

The GFC was a result of a broken global banking system that wiped out US$26 trillion off the worlds stock market, representing about half of the world's GDP and displaced 34 million into unemployment. It threatened the collapse of world financial systems. Interestingly, it was the non-transatlantic axis economies that came to the rescue of the global economy.

Around this time I was leading a payments end to end managed services business, processing payments and mitigating fraud risk for a high transactional volume prepaid carrier service, accepting multi-channel payments online, mobile and IVR, leveraging components of Artificial Intelligence and automation. Successfully maintaining a balance between managing optimal Customer Experience, reduced Operational Costs and Fraud Risk reduction.

As a payments consultant, I also had a passion for working out value systems, taxonomies and innovative business models around ways to transfer money, particularly around mobile peer to peer payments, helping enable the unbanked towards financial inclusion. I thought it was astounding that the cost to remit money around the globe was between ~5% to ~10%, a ~$500Bil industry with ~60% of total global remittances was to developing countries.

I also had the opportunity to work with clients ranging from Industry Regulators, Financial Institutions, Schemes, Payment Processors, Telco’s & Large Retailers, on projects across strategy, product development & commercialisation, software technologies, fraud risk mitigation, and managed service design, delivery, and operations.

In those early days, talking innovative governance through decentralization, Blockchain, and cryptocurrencies were seen as a dreamer’s ‘it’ll never happen’ utopia, then here we are :-)

The rise of CryptoCurrency

Bitcoin was the 1st use case proving the most efficient and cost-effective way to transfer value, compared to traditional payments networks. In my view, it revolutionised payment processing and settlement and challenges traditional market players and business models.

It’s also worth noting that not all the cryptocurrencies are blockchain implementations e.g., Radix, IOTA and R3 Corda use an alternative types of Distributed Ledger Technology (DLT).

Things really got interesting around 2011, when the value of Bitcoin spiked beyond just fun and games gaining some public attention in 2012. I remember thinking things just got real… $@1T this thing may really have legs …

The method in which cryptocurrency allows us to transfer and exchange value in a decentralized manner challenges current intermediaries and agents within existing financial and payment systems. The role of central banks, the cost to issue and handle fiat currency, the costs to processing and settlement of money transfer…

Over a decade has passed and I still stand by the same opinion that Cryptocurrencies will eventually become mainstream in one form or another. However, my real passion has evolved to supporting applications of use for its underlying Blockchain technology and innovative business models that I genuinely believe will change the world through hybrid decentralization. It’s created a global community of people with similar value systems, to empower positive change, transparency and those with a contribution to society's intent.

Birth of the first DAO

A decentralized autonomous organization/ corporation is represented by rules encoded as a computer program that is transparent, controlled by shareholders and not influenced by a central government.

Next-generation institutions will integrate humans, AI subsystems, Decentralized Autonomous Organisation (DAO) and smart contracts, to provide automated, verifiable and efficient workflows.

Bitcoin was considered to be the first-ever fully-functional DAO, characteristics incl:

  • fully transparent, immutable and incorruptible
  • has a pre-programmed set of rules
  • financial transactions are recorded in the Blockchain
  • functions autonomously and is coordinated through a distributed consensus protocol

Once the rules are established, a DAO enters a funding phase with 2 key aspects:

  • a DAO must have an internal property, e.g., tokens that can be spent by the organization or used to reward certain activities within it
  • Investors get voting rights and subsequently the ability to influence the way it operates

After the funding period is over and a DAO is deployed, it becomes fully autonomous and completely independent from its creators or anyone else.

Since Bitcoin, the use of smart contracts was enabled on the Ethereum platform.

Smart Contracts

In 1997, Nick Szabo coined the term Smart Contracts, (it’s not truly smart but rather rule/condition-based, however, we are now stuck with the term) it’s based on a simple idea:

Smart Contract: A set of promises, including protocols within which the parties perform on the other promises. The protocols are usually implemented with programs on a computer network, or in other forms of digital electronics, thus these contracts are “smarter” than their paper-based ancestors.

A Smart Contract is a program that captures all the obligations of legal contracts and executes them automatically if predetermined events occur, basically making contract executions more efficient.

A new way of raising capital

In 2016, an entity called the DAO, Ethereum’s Blockchain-Powered Fund raised $150-Million from 11,000 investors, at the time deemed as the most successful crowdfunding campaign in history. It incorporated typical functions of an investment vehicle (fund storage, project vetting/ approval, fund disbursement, profit allocation) streamlined on a blockchain. Thus giving rise to a corporation without jurisdictional anchors, is completely transparent and auditable through the code, does not rely on humans collecting fat paychecks nor the risk of inheriting lazy/self-serving salary staff sponging off the system.

The new contemporary way of raising capital emerged called Initial Coin Offering (ICO) leveraging Smart Contracts.

Biggest wealth transfer in human history

The great part of the movement is to see an unprecedented transfer of wealth to the most unlikely people. Most of whom are re-investing their proceeds back into the ecosystem and helping solve global issues in society.

Let’s not kid ourselves, and call out the elephant in the room… criminals are innovative too and are very multi-channel. It doesn’t mean we ban it for everyone! There are criminals around central stations all around the world… should we shut those down? Of course not! We manage it, just like we manage societies.. This is no different.

New Business Models, new mindsets and a global community of supporters

I’ve been fortunate to have found a tribe through the decentralized world, of similar-minded folks with a vision of a fair future for humanity, facilitated through transparency in governance, decentralised systems, and contribution back to society.

I support new innovative and disruptive business models that support this philosophy such as:

  • PowerLedger — peer to peer energy
  • SingularityNET — AI to connect to other AIs enabling AI access to 3rd world nations
  • Blue Frontiers — floating cities and innovation in governing societies

My call to action is for everyone to think a little more and look beyond the hype of trading currencies and more towards the new innovative and disruptive business models being created, potentially displacing entire value chains.

Remember that every dollar you spend or invest in a company is a vote to support that company, and what they stand for..

Anyone with half an educated brain can do some research and ask the right questions to differentiate a genuine business from a scam. So don’t throw the baby out with the bathwater (so to speak).

As part of my research to understand the technologies, I’ve reviewed about 50 whitepapers, traded across a few exchanges and have a hands-on understanding of the entire value chain and eco-system, from ICO’s, it’s business models and product development, token design and utility, go to market strategies, Community Management, etc. to STO’s… the next thing evolution…

Some useful links

  • Mining- I never really got into this as I worked out that it was only worth while if electricity was free or close to free…
  • Master-nodes — staking a bunch of tokens to run a masternode and generate some returns
  • Trading — I’ve learned that I definitely don’t have the attention span as a day trader, however, I understand the process.

Some trading platforms to look into if this part interests you: Binance, BitMEX, KuCoin, Bitfinex, Coinbase, Independent Reserve, Bittrex, Poloniex.

If seeking to engage experts across the blockchain industry, I have great network of professional credible folk who can help so just reach out. I also enjoy speaking and providing my insights on the Future of Money, Innovation in Governance & Societies, The Future of Health, AgedCare & Education.

About me: I have 20 years of experience in Information, Communications, and Technology providing advisory and assurance to enterprises and government. My focus has been around software development & commercialisation, Payments & fraud mitigation, Cybersecurity, Telecommunications, Automation, AI & Robotics to deliver revenue & risk assurance, cost down and customer experience. Feel free to connect with me on LinkedIn or drop me a message.


👩🏻‍💻 JustaskPenny 🖖

🚩 Tech Diplomat | Futurist | Technologist | Entrepreneur | Humanist | 🤖 AI 📡🛰 Telco 💸 Payments 🛡 Cybersecurity ⛓ Web3 🌍🧬🕊 www.justaskpenny.com #CISO