Money gets lots of credit (LOL) as a concept. People within the crypto space especially tend to appreciate just how profound a concept it is, just how integral it is to this whole show we’ve got going. A concept that gets less credit, but that is equally if not more profound, is the concept of “private property”. Indeed without the notion of private property money would be impossible. So, what is it?
The notion of private property refers to the phenomenon whereby some feat of social/intellectual gymnastics, we can come to “own” things outside of ourselves, things in the world. It’s a kind of geometry we perform between our physical organisms, objects and social Reality. You are here, the object is there, and by virtue of your special relationship to the object — how it came into your possession etc. — the object becomes regarded as “yours”. You become designated as the owner of the object. It becomes your “private” property.
Money is one hell of an innovation, but without the concept of private property and ownership, it’s basically — and quite literally — worthless. For it’s one thing to have money, as a general abstraction, another thing for you and me to own money, respectively. Ownership is thus to money what water is to the ocean — indispensable.
Now ownership is a pretty straightforward matter in the physical world. Thanks to the properties of atoms, it’s basically effortless to demonstrate possession. You own the shoes on your feet, and you can prove it, at least partially (9/10ths to be exact), by virtue of the fact that the shoes are on your feet, not mine. Same deal with money. So long as the money is under your mattress, and not mine, your claim to ownership is likely to remain uncontested. Should I happen to contest your claim, however, you could, if it came to it, then appeal to the relevant legal infrastructure (the other 1/10 of the law). So long as you can provide some plausible and legal narrative re how you came to own the money, and I can’t, the court will enforce your property rights. Your money will remain yours. Not mine.
Ownership has been a far tricker abstraction to negotiate in the digital world. Due to the properties of bits — namely, the fact they’re effortlessly replicable — demonstrating authenticity has, until recently, proved untenable in the absence of a trusted intermediary. That is, without a trustless mechanism for distinguishing one’s bits from another’s — for proving that the proverbial shoes on your feet are indeed your shoes and not just a replica of someone else’s — ownership of digital goods (including digital money) was but a pipe dream. Thanks to Satoshi, however, all that changed. With public blockchains and the various consensus mechanisms that enable it, we now have trustless protocols for asserting digital ownership. That’s the size of the innovation at play here. It’s not just about digital money, nor buying and selling JPEGs. Rather, it’s about computational mechanisms for proving and enforcing property rights that don’t require an intermediary. Mechanisms that — in the most technocratic scenario — could well extend into the physical world, rendering our current arbitration infrastructure obsolete.
