#1 in our series “On the money”
When we say the aim of Tagion is to revolutionise financial and monetary systems, some might see us as just another of the so-called ‘Fintech-Challengers’: a project aiming to improve the financial infrastructure by providing fresh software and institutional arrangements that allow money to flow more smoothly.
Some speak of (payment-) ‘rails’ to illustrate this. Another, more flexible and ‘liquid’ analogy would be the plumbing needed in water-related infrastructures: pipes, canals, pumps, reservoirs, taps, and faucets that make water available where it’s needed.
But our more systemic view on innovation in the financial system includes not only what you do with money and how you move it around but ‘money’ itself — the water in the analogy above. This way, we distinguish ‘financial reform’ — as in what is done with money — and ‘monetary reform’ — as in changing the kind of money that goes through the financial ‘pipes’.
In the DLT space, this might not seem like a completely new idea, as Bitcoin and many of its hopeful copycats have built on the speculative appeal of their coins to garner interest in their blockchain-plumbing.
Tagion not only offers a superior approach to energy efficiency and speed in decentralized networks, but — with the help of Decard— will also drive forward services and solutions for implementing and transacting new forms of money. In that regard, a bit more information on money is needed, which is why we will dedicate a mini-series of blogposts to it.
So what do we talk about when we talk about money?
The first point to notice here is that never before in history has ‘money’ been thought about so uniformly across the world. No matter where you ask people about ‘money,’ what they answer resembles the national currency they grew up with, or one of the handful of internationally used ones, like the US dollar or the Euro. But all these currencies — varying in name, not in nature — share a common trait: they are issued by state-licensed institutions, namely commercial banks and central banks. (If money issued by commercial banks sounds like a puzzling statement to you, please see this introduction for the background knowledge we are here taking for granted.)
When the word ‘money’ is not used synonymously with national currency anymore, a first opening towards monetary innovation is achieved. The introduction of Bitcoin has laudably achieved that for many people, including most bankers, because the question: “is Bitcoin money?” required everybody to first define what money actually is.
Unfortunately, the answers promoted by Bitcoin and crypto enthusiasts — and the new forms of money they implemented — had limited appeal to most people, even if speculators and gold-bugs would argue otherwise. Moreover, in terms of a general understanding of what new forms of money could be like, the plethora of coins churned out by the crypto industry were again mostly different by name, not by nature.
However, what people familiar with so-called cryptocurrencies often don’t realise is that there has been a wealth of conceptual development and experimentation with novel forms of money, stretching back to B.C. — used here to mean ‘before crypto’, of course. Even if these have been mostly local, very specialised and unnoticed by the public, the study of these so-called ‘complementary currencies’ can help improve our understanding of what money could be like.
We will take you through a diversity of examples and the general features and options for redesigning money in the coming blogs. For now, the takeaway is simply that money, to us, is a much broader concept than simply national or crypto currencies. To avoid hampering innovation and implementation by using narrow definitions, let’s operate with the following: money is a system of transferable units that reflects and facilitates the social relations that an economy is made up of.
In resilient, efficient, and sustainable financial systems, many forms of money — or what we will call currencies — will operate in concert, complementing their individual functions and objectives. Our native Tagion token, TGN, will be one of them, but once the federated Tagion network is fully implemented, we expect it to be accompanied by a broad palette of specialised currencies.
Let’s build this multi-currency ecosystem together, with Tagion as its backbone infrastructure!
Start learning about currency design here,
with #2 of our series “On the money”.
