Money, Cryptocurrencies, and Blockchain Technologies

Speaker: Rick Whitener, BA, retired IT professional and Scientech member

Introduced By: Marty Meisenheimer

Attendance: NESC: 89, Zoom: 39

Guest(s): Nik Hawks

Scribe: Russell Judd

Editor: Carl Warner

View a recording of today’s Zoom presentation at: 

Today's Program 020524

Our speaker today was Rick Whitener who spoke about money, cryptocurrencies and blockchain technology. Rick is our past president. He has a degree in economics, and his career work was in technology and banking. Rick began by talking about the development of trust in everyday business or trade. Years ago individuals could barter; but with bigger groups and division of labor, a common base of value was needed between trading groups. Metal coins were developed in the 7th century and paper money in the 11th century. Money is different than currency; money is a store of value, tradable, convenient, and supply stable. Currency is a tangible form of money: coins, bills and cryptocurrency (?). 200 countries have currencies. 42 use U.S. dollars or peg their currency to the dollar. 31 countries use the Euro or peg their currency to the Euro. 75% of foreign exchange reserves are in these two currencies. Sometimes national currency management doesn't work and inflation can become out of control.

Cryptocurrencies are digital or virtual currencies underpinned by cryptographic systems. They are not backed by any public or private entity. 100 governments allow crypto currencies while 54 governments ban them. There are some advantages and disadvantages with Bitcoin versus dollars. Bitcoin is actually not a very good means of payment in business but it is a pretty good store of value. Transactions with Bitcoin were processed slower than with Visa. In the U.S. the present system using paper works pretty well. The present economic view of Bitcoin is that it is exciting and ingenious, but expensive and hard to trust. It doesn't have memory.

Rick spoke a little about blockchain technology. This is a database where you can add an entity (a block) but cannot change an existing entry. The database is a distributed ledger not controlled by a central authority; It is stored on thousands of computers each controlled by different people. A transaction is sent to a memory pool where it is queued until a validator picks it up.

In summary, it seems there are advantages and disadvantages to cryptocurrency. Blockchain technology is exciting. We should look forward to further research and developments. Thank you Rick for this fine talk

Rick Whitener