For the first time, bitcoin began to occupy a prominent place in the world of technology in 2013. Slowly but surely, it is spreading more and more, mainly due to a sharp increase in its rates in 2017. However, if you decide to delve into the past, you will see that was the original version of bitcoin, which has existed for more than 1,500 years ago.
If you managed to get a time machine and teleported back in the days of the Roman Empire or even the Renaissance, where you would try to explain the functions associated with contemporary bitcoin, you probably would have thrown in jail or declared insane. Back in the past era, instead of talking about the technology of blockchain and decentralized systems, you could explain the concept of bitcoin on the example of the island of YAP.
The small island of YAP, located in the Western part of the Pacific ocean, is located approximately between the Philippines and GUAM. It’s amazing how many similarities is the currency used on the island in ancient times, and bitcoin.
The main similarity lies in the limited supply of currency was difficult to obtain. In addition, the system was used of a public register, which was based on consensus. The island of YAP and its currency is the perfect way to explain the intricate concept of bitcoin and other cryptocurrencies.
In short, money is a social concept. Most types of money is not very useful and are only a medium of exchange. You can’t use paper or gold, to eat or to hunt for food. Societies need a medium of exchange, which by common consent is of particular value to facilitate trade. It is for this reason, there was a legal means of payment.
If the amount of money was not limited to, inflation would have reached a huge level. If we were to use tree leaves as currency, everyone could access millions of this currency, making it useless as a medium of exchange. That is why the amount of money must be limited, which is now controlled by the Central banks (at least, it worked until the abolition of the gold standard — approx. ed.).
If you live on an island in the middle of the ocean, it’s hard to decide what to use as a medium of exchange. In many ancient civilizations, sea shells and fish scales were used as money, but in regions such as YAP, where there is an endless supply of these things, this option is not relevant.
The people of the island of YAP — a great naval city, and visiting nearby Islands, they found that they have materials such as limestone, which do not have them. It was difficult to produce and bring to the island. That is why it became the medium of exchange on the island of YAP. Extracted stones were transported to the island by canoe and rafts, some of the boulders weighed up to four tons.
Serious efforts should be made to mining of limestone, can be compared with the cost of computing power and energy costs related to bitcoin mining. Those who mined the limestone that received an excellent reward, as well as miners of bitcoin.
The main problem with stones were tied to their huge size because they cannot be easily transported. Money should be portable and convenient. The people of the island of YAP came together and created what became the first distributed registry, which is governed by consensus. When one of these stones (called stone Rai) changed its owner, the stone did not move. Instead, everyone in the community has approved the transaction by national recognition. When all agreed that the stone belongs to a new owner, there’d be no need to move.
There is even a story about how one of the huge rocks Rai during transport fell into the ocean. However, those who saw him, vouched for his size, and he remained a valid currency and a medium of exchange.
Cryptocurrencies work using the same principle. Bitcoin is code, so it doesn’t matter whether he is in material form or not. Whenever a bitcoin transaction is confirmed by the log appears in the blockchain. When enough nodes to confirm this, a consensus will be reached, and the entry will appear in the open registry.
It’s amazing how rational was the people of the island of YAP. The principles, which they followed 1 500 years ago are relevant in today’s world of cryptocurrency, which once again confirms that everything new is well forgotten old.