Starting with Satoshi’s famous essay, Anthony G. Parker MBCS explores what blockchain and cryptocurrencies may mean for the future of money and wealth. Along the way he reveals how the two could change more than just the pound in your pocket too.

In January of this year, the rich and powerful banks, politicians and economists met at the annual Davos Economic Forum to discuss technology, globalisation and the world’s economic activity. My sources tell me that Blockchain was one of the topics widely discussed.

The focus of interest was not the understanding of the technology itself, but how disruptive this technology could be. Blockchain, the underlying technology infrastructure behind Bitcoin, was released to the world on 3 January 2009 by Satoshi Nakamoto after writing his seminal white paper, ‘Bitcoin - a peer-to-peer (P2P) cash transaction system’.

Having been annoyed at how banks could privatise profit, but socialise losses after the financial meltdown in 2008, Satoshi wanted to create a new form of money- one that couldn’t be susceptible to corruption, power, politics and economic cycles. A form of money that had distinct advantages over the old, slow form of money we take for granted. These advantages I like to call the 4 D’s:

  • Digital - it is the first scarce digital resource, recorded on an open, public ledger
  • Decentralised - it’s not governed by any bank or institution and cannot be shut down
  • Deflationary - With only 21 million bitcoins ever made, the price increases as more and more people use it
  • Divisible - One bitcoin can be split into 100 million Satoshi

Bitcoin has been called many things - internet money, digital gold, fast money; and, more negatively, rat poison, a fraud and a Ponzi scheme. Whatever your understanding of Bitcoin, and the distributed ledger technology it’s built on, for the first time in IT history we now have access to a standard, open, decentralised immutable ledger that anyone can transact with globally without needing permission. We don’t need to trust anyone using it - we trust the defined and provable maths highlighted in Satoshi’s white paper.

With nearly 10 years in the wild, gone are the arguments about the energy consumption of Bitcoin when compared with the energy used printing, storing, transferring and securing paper money and the vast financial products around it. Gone are the hacking arguments - whilst digital wallets, private keys and exchanges have definitely been hacked, the Bitcoin blockchain itself is tamperproof.

If you make changes to your copy of the ledger, it will be rejected by other computers in the network. Gone are the arguments about how GDPR will render it unusable - businesses that adhere to GDPR ensure personal data is kept privately off-chain or anonymously stored on-chain. Gone are the mistaken views that it’s only used by criminals.

As an open and public ledger, federal and police authorities all over the world can track transactions - it’s easier to buy your narcotics anonymously with local currency than with Bitcoin. How about the argument that it’s too volatile? Venezuelans don’t think so. If they bought Bitcoin at its height of $20k in January 2018, they would still have more value left in their pocket than if they had kept hold of their Bolivars due to the hyper-inflation in the country.

We’ve seen Bitcoin at heights of $32 only to crash to $2, then climb to $256 and crash to $70, climb back to $1,000 and again crash to $200, and recently crash from around $20,000 to $5,800. We have seen these market cycles before and have become exceedingly efficient at not worrying about the volatility, as with all new asset classes. It’s also only temporary as this technology grows and more people adopt it and adapt to it. Is it a bubble? Well, yes, but no more so than the stock market, housing market, car loan market, the current deficit and the very worrying corporate bond market.

Putting aside the assumed problems that media like to portray about Bitcoin, let’s discuss how disruptive the technology behind it could be. From CIOs to IT Consultants, those that study Blockchain start to realise its potential. Blockchain is the perfect combination of a peer-to-peer (P2P) decentralised network, cryptography and token economic game theory or cryptoeconomics as Vitalik, the founder of the second largest cryptocurrency Ethereum, likes to call it. 

This makes the world’s first immutable, secure, open and public digital ledger suitable for double entry book keeping. This sounds like a vast improvement over our current financial legacy systems because it is decentralised and it can’t be shut down or governed by any state, business or individual user.

Satoshi Nakamoto (whoever he/she/they may be) has given us the ability to create a pure uncounterfeitable digital currency; one that has been the desire of the banking industry for many years. The banking sector is rightly worried - they will have to adapt or die in the new digital currency space, but is it only banks that should be worried?

Being programmable, Bitcoin and other cryptocurrencies using blockchains start playing in a very different financial landscape. They can be programmed to allow all kinds of economic activity, often without a middleman, escrow agent or any human arbitration of any kind.

This programmability, without having to trust anyone, is impossible with current Fiat currencies. In a digital age programmability may become one of cryptocurrencies important advantages. Bitcoin has a very simple scripting programming language, but other cryptocurrencies are trying to deliver more complex operations in secure blockchain environments, validated by computers all around the world.

As developers attempt to improve Bitcoin, a wave of innovation has come, allowing anyone to deploy new technology from their living room. There is an avalanche of new technologies with no gatekeepers to stop it - just take Ethereum, the second largest cryptocurrency by market capitalisation.

The underlying cryptographic signatures, networking stack and scripting language have all been upgraded to create virtual machines and smart contracts - a mechanism to incorporate these more complex interactions with the same underlying security guarantees from a network of industrial scale miners.


Trust is being eroded in the financial industry. We have had a financial crisis, PPI payments, Libor rigging, publically bailed out banks conducting financial terrorism on SME UK businesses, low politician ratings, numerous business hacks, banks supporting cartels in money laundering, banking legacy systems falling over or system upgrade issues - the list goes on and on.

The Financial Crisis in 2008 has done little to change things and many of the same problems still exist. There are still systemic risks in the property, credit cards, student loans, stocks and pensions markets. Banks have been asked to store more reserves but with fractional reserve lending they continue to print money and balloon the money supply to debase our current monetary system. Will we bail out the banks a second time? Bitcoin came out of the 2008 banking crisis when people started to lose their faith in banks managing their money. Anarchists, libertarians and especially Millennials have jumped on Bitcoin to disrupt the traditional banking industry they don’t trust and used it as their revolution.

Millennials may never buy gold, bonds, stocks and shares but digital money is something that fi ts right into their lifestyle. There is now competition in money with Bitcoin being the best one around. Digital currencies secured by blockchain technology will gradually creep into our lives more and more and people now realise that Bitcoin is not a scam, a Ponzi scheme, or going to crash to zero. It’s real, it works, it’s secure and it’s revolutionising the next digital economy.

Centralisation vs. decentralisation

Today Web 2.0 includes Airbnb, Uber, eBay, Amazon and Spotify, which we are all familiar with and were unthinkable before the internet was born. These services make money by the value of users’ personal data and actions. This is subsequently data mined and sold on to advertisers and marketeers as well as feeding their internal AI systems. Remember the adage: ‘If the service is free - you are the product’.

These majorly centralised web platforms have a lot of substantial problems - whether it be a central place of failure or an authority that can shut elements of the network down if they wish. We are mostly happy in the first world that access and freedom of speech will be supported on such platforms, but we are quickly learning that the rest of world isn’t like that. Just take the censorship of the internet in China as an example. By decentralising the web we can have much more protection over our digital rights globally. Consider a decentralised Twitter. The first problem we come across is where do we store the tweets in a distributed, global network where there isn’t one central platform.

For the decentralised economy to grow we need decentralised server storage for our decentralised services, a decentralised identity, and to decentralise access so that anyone can have access. What we are talking about is a stack of dependencies and applications that can rest on top of a secure decentralised blockchain layer. This is what the Blockchain environment is like now, in 2018 - building out the decentralised infrastructure that will run our future Web 3.0 applications that can never be shut down and controlled. P2P e-commerce, where consumers and producers interact directly, is perhaps the first use case of Bitcoin and crypto in general.

Crypto can be used as a trustless method of exchange anywhere in the world. Reputation networks and community guidelines have made this possible since the early days of Bitcoin and are now starting to become much safer via smart contracts that provide trustless escrow. With Ethereum and their virtual machine you are able to pragmatically build far more complex systems, e.g. the ability to collatorise a certain amount of cryptographic assets in such a way that it is provable in a smart contract.

These assets can then be traded for new assets from a counterparty, based on the value of the underlying cryptographic asset. This can happen on a global scale and you don’t even have to know who the counterparty is because this collateral is verifiable and if you default on the loan, the collateral can programmatically be sent to the original owner - a trustless peer-to-peer loan.

Issues and solutions

However, this is only the tip of the iceberg. With programmable blockchains, combining the power of a distributed infrastructure with decentralised governance and autonomous consensus rules that enable trust between peers, we achieve a completely new and groundbreaking way to create and distribute value. It’s not simply a currency or a way to pay someone on the internet. There is a lot more going on than just payments.

Value can indeed be created centrally e.g. Facebook, but with a decentralised system you can have a share of truly scarce resources e.g. Art, property and knowledge. Every protocol previously created didn’t have the concept of digital scarcity. It’s difficult to transfer an asset from one person to another and prove that it has completed successfully in digital form. Now that you can, you can expect a swathe of innovation in new behaviours based on this provability of asset transfer, and increased value.

Once you can prove the provenance of an asset on the decentralised network, and where it originated, it becomes much more valuable. Coded governance structures can also be innovated where participants vote to update the blockchain, monetise identity and make illiquid assets, like time, become liquid. The traditional industries are finding it very hard to compete with a decentralised peer-to-peer network.

There is no cost structure on the other side - it’s just a peer-to-peer network. Just like the Bit torrent network, which has laid waste to many industries including the video industry, there were winners like Spotify or the iTunes store. The previous Web 2.0 revolution was a challenge of interface - moving from desktop computers to mobile phones. Blockchains are part of the Web 3.0 revolution - the revolution of digital internet money and assets.

Businesses using crypto as payments do not need a fraud department, a disaster recovery process, payments to third parties like Mastercard and Visa or a large team of accountants. Blockchain gives us a way of transacting value globally in a far more public and transparent way.


It’s not all rosy, however. With new technology comes new hurdles and issues. In the Blockchain space, due to the fact it has originated outside of the usual financial system, it can be incredibly difficult to quantify, measure and control through legacy financial models. Blockchain can also be extremely complex to set up and run within organisations whilst it is on the path to maturity.

One such complexity is the scalability of Blockchain solutions. When you run a computational activity from a smart contract on a decentralised network, you don’t want that activity happening on the whole network and slowing it down. The activity needs to be held centrally and technologies such as sidechains, sharding and the Lightning Network are being developed to help achieve the scalability we need for mass adoption.

We also have trade-offs in the Blockchain space. Throughput vs. security vs. decentralisation is a key discussion amongst innovators - you can have two, but not all three. Bitcoin is an example of a blockchain that has increased security and decentralisation at the expense of throughput - when the network is congested, higher transaction fees apply, which is not a great customer experience.

EOS, the 5th largest cryptocurrency, prioritises throughput over decentralisation and security. Their 10,000s of transactions per second could rival the established players like Visa and Mastercard, but like many other Blockchains, we will have to wait a while for user adoption and applications to be built on it. Currently, user experience and adoption is lacking throughout the cryptosphere.

Using wallets and apps are difficult, cumbersome and have not yet improved on the status quo we are used to. Usability is one area that is calling out for resource and that’s not the only one. Finding experienced and proficient developers is becoming increasingly difficult as more and more innovation happens in this industry, mainly from large consultancy companies who can afford the resource. Anyone spending time learning Solidity for smart contract construction on Ethereum can expect a wealth of opportunity in the future as more and more Blockchain solutions use that functionality.

Risk and reward Buying, selling and investing in cryptocurrencies also has its pitfalls. Beyond speculation and rampant tribalism for those holding specific currencies, Blockchains can be slow and complicated. ISO standards for Blockchain (ISO / TC 307) have yet to be ratified and education in the Blockchain space is only just starting to gain momentum.

Companies are starting to wake up to the realisation they have to understand this technology or find their traditional business models dying. As more and more businesses turn to Blockchain for efficiency gains; education and understanding in the Blockchain space is of paramount importance. But the market is slowly maturing, with more and more use-cases and infrastructure being built ready for mass adoption. The disruption has started with many new and traditional companies already showing the way and proving some of the promises of Blockchain:

  • Overstock, the American online retailer is currently processing up to $120,000 of goods per week with cryptocurrency. Their crypto team does not have a fraud department, consideration for disaster recovery or a need to pay expensive third- party licensing fees to Visa or Mastercard. On top of that, the number of accountants needed to check transactions can be vastly reduced or automated.
  • is already selling property for Bitcoin with many other projects looking at easing property transfer, ownership charges and registration.
  • Hashed Health, in the US, is encoding doctor’s credentials and education on the blockchain, so when they locum at a different hospital, their details are checked in minutes and not days. Putting doctors in front of patients quicker is just one example of how blockchain can save lives. 
  • Also, in the medical space, is Lancor Scientific, who use a Blockchain solution to provide trusted, verifyable and auditable data around cancer diagnosis and screening, vastly reducing costs and democratising cancer screening.
  • Zapaygo is a free smartphone application that links suppliers with customers so that they can pre-order goods and services in the sports, leisure and hospitality sectors, already signing the NEC in Birmingham to it’s stable.
  • SVKCrypto is a community-based, £50m fund supporting applications on the EOS platform. Each month they see 200+ people attend their free event in London, usually discussing the future of Blockchains and finding great advocates to present their experiences and view of the future.
  • FunFair is an online gambling and casino game, built to be 100 per cent fair and transparent and using Ethereum’s payment channels to ensure scalability off - chain.
  • Waltonchain, a Chinese Blockchain project, is revolutionising the supply chain management industry with IoT devices. Instead of customs or a dockyard employee only being able to accept your consignment during working hours, IoT sensors will automatically update the Blockchain with the location of your goods and ensure transparency for all parties.

ICOs and traditional investors

In 2017, the overall ICO market where investment is used to finance projects in the Blockchain space reached $5.4bn. In 2018, it’s currently running at over $15bn. ICOs and infrastructure projects in Blockchain are sucking in traditional investments. Many people believe that once money enters the Blockchain space it rarely leaves - it’s where the smart investment money is being placed. Hedge funds are clamouring to assign a portion of their portfolio dedicated to cryptocurrencies because they are a non-correlated asset -decoupled from geographical economic impacts, political persuasion or governmental regimes.

Turkey, Venezuela, Columbia and Argentina are all taking notice. Central banks are investigating their own digital currencies on Blockchain to track every single transaction to prevent terrorism, money laundering or continuing to control their populations. One such example is the Venezuelan Petro, Maduro’s venture into the Blockchain space, even if it’s untrusted by the rest of the industry and Venezuelans themselves.

Pensions and sovereign wealth funds are waiting for a robust custody solution before assigning a portion of their portfolios to cryptocurrencies - a multi-trillion dollar industry. The traditional fi nance industry is getting ready for the onslaught of trusted, distributed and transparent Blockchain technologies.

We’re in a fascinating time - this social experiment called Bitcoin is creating competition for the USD, Wall Street, Silicon Valley and some of the other larger entrenched interests in the world. What we do know is that the Bitcoin blockchain is a vast improvement over the current settlement and remittance systems that we have today, but this is only an incremental efficiency update on current systems.

To fully appreciate Blockchain, we have to look out of the windscreen rather than the rearview mirror. The cryptonative mindset is thinking about types of applications that have never been imagined before, which can now be delivered over a secure decentralised network. There are hundreds of business use cases for this technology, mainly driven by market efficiencies, e.g. companies that are taking rent-seeking fees, or artificially liquid markets.

The business model of untrusted intermediaries will be highly disrupted - why will we need Ticketmaster or Stubhub when artists can sell their merchandise direct to customers without a trusted or untrusted intermediary? Facebook was natively enabled by the internet - it never existed before it. What future blockchain apps will natively use blockchain in a way we’ve never seen before? What business models will survive and be able to cope with decentralised apps which are global and unstoppable?

Incumbents will have to adapt their core business model - they can’t just easily create their own decentralised blockchain; that would be like companies creating their own internet. They will eventually have to work WITH the decentralised economy rather than against it and those that take a pragmatic approach to this will be the future winners.

There are a thousand reasons not to invest in a speculative technology bubble and, with any new technology, we don’t know all the answers. But there is a lot of development and infrastructure building happening to enable this future - do not be fooled by your scepticism of how useful the technology could be.

Bitcoin vs. gold & USD as a store of wealth

From stone tablets to gold, mankind has used money of many kinds throughout our history. The adoption of one monetary standard over another is not arbitrary however - money needs to have some unique properties for it to be classed as a valuable. The properties of scarcity, divisibility, fungability, durability and recognisability can all be attributed to our current store of value, Gold. But why is this shiny metal so valuable? Before humans, gold had zero intrinsic value.

Value becomes real when that person has a reason or purpose to use that item. Water has an intrinsic value but only to a human that is thirsty. Intrinsic value is the value we associate with an item. Nothing has real intrinsic value unless the majority agree it has - and this is really a subjective viewpoint in the eyes of the valuer.

Gold was seen as valuable because it couldn’t be debased or modified by governments or politicians and could be made into jewellery. Today we find gold difficult to transport in large quantities, expensive to produce and, potentially, at an infinite supply. With America owning most of the gold after the great depression in 1939, most other countries pegged their currencies to the US Dollar and it has become the global reserve currency we see today.

In 1971, Nixon dropped the US Dollar from the gold standard and most currencies are now just promise notes from governments, backed by guns and bombs. This is when the US Dollar became what is known in the financial industry as Fiat money - distributed locally, government backed, but not backed by a physical commodity like gold.

So, is the US Dollar a good store of value? Fiat currencies are created out of thin air by banks and central banks with no limit on supply and rarely with the whole supply even being known. Call it currency debasement, inflation or quantitive easing - printing money enriches the printer at the expense of the public who holds the previous printed money. It is the debt that runs our current economies and we have accepted it that way for years.

Now, we are seeing troubles in Zimbabwe and Venezuela when it comes to hyper-inflation. Fiat also suffers from durability - it only lasts as long as your bank permits and even then, slowly looses its value. Banks can destroy fiat at the click of a button - ask a Cypriot, an Argentinian or an Indian. Try to send an international wire money transfer and you have to do it during banking hours. Even if successful, it will take five days with many intermediaries adding your details to their centralised systems. If you send a large amount you will be censored. If you send your hard earned money to your family in Afghanistan, you will be stopped.

In our digital world, how is money transfer ever going to compete with Bitcoin in a global open marketplace? With fiat currencies, you are dependent on a third party for your wealth, which is not an attribute of money many find attractive. Requiring trust in politicians seems a poor foundation on which to build a prosperous society. The average lifespan of fiat currencies is 50 years. The US Dollar has lost 96 per cent of its value in the 104 years since creation by the Federal Reserve in a process called inflation or currency debasement - how foolish do you have to be to hold it over the next 100 years?

Bitcoin is in another class entirely. It’s totally uncounterfeitable with its blockchain security and is provably scarce - I can tell you exactly how the supply of Bitcoin will be in one week, one month and one year from now. It is also highly portable across borders with speed and has no weight, smell or physical body. It can be moved at distance, without trusting a third party. It is the only money that doesn’t require permission from an overseer. Bitcoin cannot be debased, no matter how many guns a government wields, propaganda it spews or people it imprisons.

Lastly, and, perhaps, most importantly, it has an attribute that will become an essential part of sound money - it’s programmable. Either the innovation of owning your own money, deciding how to spend / save it and having a monetary policy based on savings rather than debt has long-term value or it doesn’t.

If the global economy wants a shot at ‘sound money’, the reality is that Bitcoin can provide that. It was created by someone we don’t know and achieved the traction and security it needed when nobody cared. It’s uncorrelated to the traditional finance system, local economic activity and it’s global. It’s also a-political and based on maths rather than people.

Many believe that it’s a pretty good invention and way better than the systems we currently have - and it will become more and more useful to people over time. Erik Voorhees, a long-term proponent of Bitcoin, and CEO of Shapeshift, believes that Bitcoin is not just ‘sound money’ but ‘supremely sound money’. The Cypriots didn’t realise they needed it until the bail-in where people realised they didn’t own their own money. Greece shut down ATMs with many Grecians not being able to access their cash. India made savings illegal and removed higher denomination notes.

Brexit has already seen a 20 per cent reduction in the purchasing power of the British Pound and with a run on Northern Rock bank back in 2007, even the British are seeing the benefits of new globalised fast money like Bitcoin. Bitcoin’s intrinsic value is as an unstoppable permanent record of transactions on a secure payments network - a very effective store of value to rival the $7tn market of Gold. It has the ability to send large payments all around the world for minimal fees and is also deflationary and programmable. That IS the intrinsic value of Bitcoin and why many think it could be the world’s new digital store of value, even if the market has a hard time of evaluating that value today.


Our Digital Society is here. Our youth are growing up in this environment, immersed in the world through their mobiles. In China no one carries cash any more. If I send digital flowers to my wife, I doubt she would be impressed - but my friend’s daughter would be bowled over receiving a digital bouquet of flowers from her boyfriend. As we move more into a digital world, it makes sense to the younger generation to own digital assets and to have a digital savings account.

The next generation aren’t interested in buying gold, stocks or shares - but they will buy cryptocurrencies and support Blockchain platforms. A teenager in a bedroom can create a fair and open application on the Blockchain and over time this will become easier and more widespread. Anyone can ‘bootstrap’ their own digital assets on top of the Ethereum network without needing to have a pool of global miners securing your blockchain. As this is open source you can do this now for free. 100,000+ assets have currently been created on top of the Ethereum blockchain.

Some have been fungible assets like currency, but others are non-fungible assets like a powerful digital sword, used in a particular game to improve your battle prowess. However, as this was created as an asset on a decentralised blockchain it is now transferrable between games and applications. The global market for purchasing in-game digital items in 2017 was around £100bn, and set to grow.

The League of Legends superbowl in the Birdcage in Beijing brought in 88m TV viewers, many more than any other local sports event. Blockchains are really harnessing the human capital in the world. Society has been unorganised for thousands of years before industry and companies introduced people to economies of scale in the pursuit of profit.

Previous to the industrial revolution, you could mould your life around your interests and aspirations. For the past 150 years the industrial revolution has brought a productivity model that drove large corporations and the concept of a nation state to protect that. Software is allowing humans to be elevated back to that flexible state where you can abstract yourself from the old economic model and discuss your interests in a new connected, yet decentralised, economy with others who share that interest. Previously it was a job for life at one organisation - now it’s working on a number of different initiatives all at the same time whilst being more in tune with personal interests.

Blockchains could herald a new decentralised, fair and anonymous global economy - helping digital ecommerce, not hindering it. With Bitcoin, financial institutions can start to build a monetary system based on savings, not debt, and it could become the world’s reserve currency and our solution to sound money. As a new asset class, it will fluctuate wildly until we get mass adoption, just as gold did after the gold rush. What can’t be underestimated is the amount of ongoing development and infrastructure building that is taking place - it’s only a matter of time until consumers benefit from globally distributed apps on top of secure Blockchains.

Blockchains are here to stay and truly out of Pandora’s storage jar. They will be highly disruptive to current markets and are probably going to be worth far more than the £230bn they are valued at today - keeping in mind that both Apple and Amazon are currently valued at $1tn. Blockchain are the real deal for our future decentralised digital economy and, even though we are still in the innovative early adoption phase, it’s far better than what we have today.

Anthony G. Parker (MBCS) is a certified IT professional member of the BCS, Founder and Blockchain Strategist at Cuberoot64 Ltd. Cuberoot64 takes complicated and difficult concepts, breaking them down to simplified terms to improve strategic focus through relationships and technology. They make technology understanding as simple as 2 + 2. Anthony is also Chair of the BCS Berkshire Branch, holds an MBA from Henley Business School and is a Freeman of the Worshipful Company of Information Technologists.