The Role of Money and the Opportunities for Blockchain

Oliver Lindsay
4 min readMay 1, 2021


The form and characteristics of money have changed dramatically over time but its fundamental role has stayed the same. It allows for people to participate in, and advance, their situation in a community. It allows for individuals to address the different levels of Maslow’s Hierarchy of Needs. Whether that be bartering “potatoes for pottery” thousands of years ago, or a down-payment on a house today.

The concept of money has overthrown strength and bravery as the primary means of finding shelter and security and thus has allowed for intelligence and ingenuity to become the core drivers of developing society. It has 3 primary functions — it is a store of value, a medium of exchange, and a unit of account, that allow for the creation of what we know as an economy.

Money (in the form of a fiat currency) is what I receive each month in exchange for the work that I do. That allows me to pay for rent for my home, to go to the supermarket to buy food. It allows me to take care of the base level of Maslow’s Hierarchy — ‘physiological needs’. My community (my country), takes care of the next layer — ‘safety’. Because we all agree, in the UK, that the pound is our national medium of exchange, I can trust that in Skegness or Scotland, I can walk into a random supermarket and buy a banana from a total stranger. I can trust that they will accept my pound and that there will be no energy wasted on bartering. We are part of the same community because we both are governed by the same authority. And that authority, has decreed that the pound be what everyone uses to buy their bananas. Our currency, the pound, is what’s known as a ‘fiat currency’ — literally ‘a formal authorisation or proposition; a decree’. Other countries, with different governments, decree that their currencies be called different names and take different forms. The American government have the dollar and China, the yen.

Our government use that same pound to fund projects that are mutually beneficial to us all. Things like infrastructure, roads, the NHS health system, and the army. Because of this community, and because of this attention on national security, we can feel generally pretty safe in our day to day lives. We have a shared interest that it succeeds because we would like to keep our shelter and our safety for the long term.

Money also allows that same government to assert control over our community through the rule of law. If we don’t contribute a proportion of our money to those shared projects through taxes, the government will demand that we be locked up. Any breach of trust in our shared economic system through stealing or fraud will be addressed and punished to maintain the value and trust in our system.

As long as I abide by the rule of law, I can move on to fulfilling the next levels of Maslow’s Hierarchy. And because I’m able to store and track my money, I’m much better equipped to do this.

“I cannot file a complaint, against whom would I file it.”

Thus, trust and control are two key characteristics of money that have proved its usefulness over time. However, they also represent its limitations. For money to be successful depends on a huge amount of people who’ve never met each other to agree that it has value. It depends on a central authority (usually a government) who are naturally susceptible to corruption and self-interest. If it’s exploited, people lose faith that their currency means anything, and the whole system falls apart.

When governments go awry, it leads to a feeling of powerlessness — “I cannot file a complaint, against whom would I file it?”. This is an all-too-common story of property being seized by government authorities in the Central African Republic. Countries across the world can use financial institutions to control the flow of money to suit their interests. After the sensitive Edward Snowden situation, for example, the American government prevented credit card processors from accepting donations to Wikileaks.

The opportunity for blockchain

Blockchain presents a way to store and exchange money in a completely automated, trustless and permissionless way. In the words of Bitcoin founder, Satoshi Nakamoto, “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without the burdens of going through a financial institution”. It’s regarded as the next major disruptive technology and worldwide computing paradigm, reconfiguring all human activity as pervasively as did the Web. It would mean detaching from these centralised authorities that we’ve discussed. If adopted, it would remove power from fallible institutions and pull at the very fabric of our communities. It would revolutionise the financial system.