An ancient currency on an island in the Pacific Ocean will ease the understanding of how the “revolutionary technology” works with “information technology chains”
Yap is an island located in Micronesia.
Scattered over the island, you can find some big round stones with a hole in the middle. They are called “Rai-stones”. These stones are the citizens’ private money.
The stones are too heavy to be moved. The biggest weighs up to four tons (about 8820 pounds).
The hole in the middle is made so you can put a stick through it and move them after all. First and foremost, from the island Palau to Yap. Palau was Yap’s answer to “The Royal Mint”. It was on Palau the stones were mined and later transported by canoe and outriggers to Yap. There they were in more than thousands of years used as assets and means of payment.
Because the massive stones cannot be moved so easily, the system works so everyone on the island knows who owns which stones.
When a stone changes owner, everybody is informed. The stone is not moved. The change is downloaded to the collective memory.
Everybody also knows the value of the stone. Among other things, its value is determined concerning its history. A stone with an exciting and exotic history is more valuable than a stone with a dubious reputation.
The system has many advantages. Everybody is informed and involved and has thereby also accepted the system and the value of its elements.
Should an owner die, then the stone does not lose its value. And a fact that must not be underestimated: the stone does not lose its value because a single owner owes himself to above the chimney.
The citizens of Zimbabwe and Venezuela would have had it a whole lot better if their values had been parked in large stones with holes in and not in banknotes guaranteed by the national banks.
The real points are that the system is transparent and that everyone accepts the reasons and knows the history.
There is a stone that ends at the bottom of the ocean. But since everyone agrees that it is still on the bottom of the ocean, it is included in the value chain like all the others.
We turn the time to the world in 2018 on the blockchain. During a networking event in Bangkok with blockchain technology as a headline, the presentation was opened with the story of Yap and the big stones with holes. Because it is the simplest way to explain the blockchain phenomenon.
Now we only use mathematical formulas and computers, but the principle is the same. Everybody knows everything and the history is complete.
Blockchain is the underlying technology for cryptocurrencies. The transaction takes place directly between those involved with the blockchain chain as the common overall collective memory that cannot be changed. But every transaction is registered.
In Asia, there is a rapidly growing understanding that blockchain is a new technology that, like any other new technology, will disrupt and revolutionize the known systems. It is a superstructure on the Internet, which in this context is as old technology as the electricity and combustion engine.
It’s massive decentralization, which means we can do everything directly with each other in a safe environment. It is still so early a stage in development that it hides a little the clouds, what it means to the individual. For now, the cryptic currencies have taken all the focus.
In 2016 a Chinese professor believed that in 2018 we would see the first changes in everyday life. Patrick Dai, from Asia’s largest blockchain platform, the Singapore-based Quantum Foundation, believes it may take ‘two, three, or maybe up to five years before technology becomes ‘consumer-based.
The sharing economy will get a big boost because it is based on trust. Blockchain is a new way of transferring assets and values. From person to person with confidence based on math and computing power.
The Asian pioneers agree that we will experience the first breakthroughs within IoT (Internet of Things), health care, and supply chains.
Governments are currently on the sidelines. Which always happens during new technological breakouts. But states and communities will also be able to use the technology, for more efficient service and legislation.
The principle behind the Rai stones was created in the distant past. Now they also use credit cards and banknotes at Yap. But the stones still represent a value that changes hands at social events like weddings and funerals. Confidence in the system is still based on the common memory – now in the new technology blockchain, just parked in computers.