Ser, Do You Know What Crypto Is?

In collaboration with WagMedia and PolkaHaus

Intro

In this article, the goal is to provide information, as simple and to the point as possible, about Cryptocurrency, towards audience which is not familiar or completely unaware of Crypto space.

We will not explain how cryptocurrency works and what is the technology behind it (as many people doing), but how it works FOR US, what it accomplishes FOR US, as users.

Like an elevator, right? You dont care about the mechanics behind it or how it works. You press a button and you go. First, we gonna give a simple explaination, we follow up with an example and accounts and in the end some final thoughts. 3 things we need to have in mind: A dollar, a computer and a tool.

Dollars

Dollar is complex pieces of paper that creates physical scarcity. Made by expensive printers, with complex signs and numbers in order to enforce the scarcity mentioned above. If anyone tries to copy dollars, its illegal and will go to jail, so its enforced scarcity. If we think of a dollar and how it holds value, its because its scarce and the supply is controlled. On the other hand, its printed at will so the value drops as time passes. Also, we have the digital version of the dollar, where someone keeping an account of it, at a bank, and this requires trust. So when we think of dollars, we can think of it in physical form (trying to accomplish scarcity) or in a digital form which requires we trust a person to keep the correct numbers in a computer.

Computer

Computer is a machine that does many things. Its complex actions! It gets an input (like a mouse or a keyboard or data feeds etc) from users, it does some computations (proccesing) and it comes up with actions. INPUT -> PROCESS -> ACTION. over and over and over again.

Tool

A tool, is a specialized instrument that is needed to accomplish a task. So cyprtocurrency is a tool for digital scarcity "inside" computers. In simple words of what cryptocurrency does for us, is that creates digital scarcity in a computer enviroment. We can think of stocks, we must trust a person or a business to keep account of our shares, or in the past we have physical versions of them. Cryptocurrency keeps account automaticaly of the scarce digital entities.

Example

Imagine a person walks into a car wash machine for services to be offered.

In a world without crypto:

Physical or digital dollars are needed in order to use them at the machine which is an automated process.

1. If we use paper:

a) A person needs to come and pickup the dollars from the machine which means costs (gas costs etc) and owners time cost. b) A person has to deposit the dollars in the bank which means additional costs or trust someone else to do it. c) The owner has to refill the wash machine, owner time cost.

2. Digital dollars:

a) Trust based accounts in company servers. we have to trust that a person have to type the correct information, to set up accounts (time cost), the credit card have to be setup correctly...all these means costs. b) machine owner orders refills

In general, its insecure, time costly and expensive all of the process shown above.

In a world with crypto:

a) The machine has a crypto account, no individual needed to type in that account or keep track of it means no other trust party needed, we can automate business and finance instruments while we cutting costs in many different ways. b) The machine can automaticaly pay for pick up of cash or convert digital money to crypto. So if someone uses a credit card he can convert it to crypto and the machine will have a balance. c) It can automatacly send funds to the owner. The owner isnt involved in the process anymore. The machine just sends him the profits because now the machine has an account. Also we could have the machine connected throught an API with another computer and have the machines reffiled by setting up the orders with x charge. Lastly with order automatic reffils it will start getting a profit sended to the owner of the machine. The owner sets up the program one time to be kept filled and it runs automaticaly. Machine is self sufficient. Thw whole process automated reducing significantly the costs.

Machines can now have value accounts. these accounts hold value and dont need human labor to trust managment of funds

Accounts

Account creation and managment is now automated.

Accounts:

1. Complex math interactions (financial inclusion meaning anyone can participate and permisionless access so better financial tools)
2. Automated processes (everyone is treated the same/everyone follows the same rules/ fair world with less racism
3. Proof of ownership key (NFT) (end of theft for expensive items)
4. Record keeping and transparency (no accounting department needed for busineses)

What blockchain does? Digital scarcity -> all financial actions are programmable -> more inclusions, less costs, higer world wealth, close income gap.

Final Thoughts

Do we want people to manage our financial processes or do we want predefined human ingenuity in mathematics? Crypto is math based systems. We design the system, it behaves a certain way and we know the results we gona get. Crypto is digital programmabale scarcity while economy is human managment of scarce resources. The current system runs on trusted parties and legal work. Crypto runs automaticaly with no human or legal costs. Its an agreement of computers.

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