The future of money, the great sweep of historical change, would tend to indicate that we haven’t seen the revolution yet. People on the tiny Pacific island of Yap have preserved an ancient culture amid centuries of change. And on a recent afternoon, Cyprian Mugunbey took his son to see a time-worn piece of the family fortune. This piece of stone money was given to your grandfather, my dad. He built a house for some people. There are thousands of these stones all over the place here. They’re actually an ancient form of currency. And, crazy as it sounds, understanding how they work offers a window into the future of money. My name is Theodore Rutun. Currently, I am the Speaker of the Yap State Legislature. My family has some stone money. Yap has no precious metals and little in the way of stone. So, centuries ago, voyagers began traveling to a neighboring island about 300 miles away in search of something rare. What they brought back became a form of wealth that has fascinated scholars, because it works without bills, or banks, or just about anything else you’d think of when you think of money. They would cut it out of the stone, hack it out, smooth it. They would roll it down to their canoe, put it on the canoe or on a raft. Normally, it would take a year, or half a year. The value of stone money, if you want to put it in a nutshell, comes from the work that goes into that particular piece of stone money. And then you sail it back to the island, and it goes outside the chief’s house. But the twist on the story, which makes it interesting to people like me, is that, sometimes, when they were bringing the rocks back from the other island, there’d be a storm, and they’d have to throw the rocks over the side of the raft. With money this heavy and hard to lift, it often changed owners without actually changing hands. A stone outside your house can become your neighbor’s simply by both of you saying so in public. And the oral tradition was so strong that, by an early account, even money tossed overboard could remain part of the system of exchange. What difference does it make whether the stone’s outside my house, or at the bottom of the Pacific? It’s not going anywhere. And so you have this idea that who the money belongs to is what everybody remembers the money belongs to. Money is a communal story about who owns what. It’s always been just a matter of who we trusted to tell that story. Yap’s ancient system, and the digital dollars in your bank, work because what you have is connected to who you are. But there’s a big difference, one that could make Yap’s money a model for the future. Yap islanders remembered who owned these stones without needing any intermediary, like a bank, or a government, or a company to keep track of things. When you live in a small village, people all know the story. Where did the stone come from? How many times it’s been exchanged. The more people who know, the more secure it is. And, in essence, this is the idea underpinning some of the newest forms of digital money we’re seeing emerge now, like Bitcoin. In some sense, Bitcoin is a return to this earlier concept of communal record-keeping, of communal memory. Bitcoin appeared shortly after a monster crisis shook the world’s faith in our current banking system. In 2009, an anonymous programmer, or a group of them, launched what appeared to be an alternative system, founded on principles an anarchist would love. Without any government or banking intermediaries, the system issues its own money and verifies transactions using a powerful network of computers. They basically took a core function of government, and they automated it. Instead of the bank and the banking system, instead of the dollars which are issued by the government, you have a piece of software that gives you a thing that looks like a bank account. Just like with physical cash, you don’t need a photo ID or a physical address to use Bitcoin. And just like cash, once you spend a Bitcoin, you’re money’s as gone as if you’d slipped a dollar bill into a vending machine. So, having things in the virtual world that you can’t copy, that actually makes the virtual world more like the mundane world. And people who believe in the technology have been buying a lot of Bitcoin. Eight years after it launched, the network was worth more than 25 billion dollars. The security of that wealth is guaranteed, in part, by putting the entire list of who has what onto a network of computers instead of in one central place. And these computers simultaneously track and update every Bitcoin transaction around the world. They group together transactions that happen around the same time into what they call “blocks.” And then those blocks are linked, which is why you often hear that the technology behind Bitcoin is called “blockchain.” You can think of a blockchain as a global, digital, automated version of the oral tradition that tracked ownership of the stones on Yap. In essence, a blockchain is just a high-tech, universal record book. Imagine that you have a piece of paper, and that any infinite amount of people are also holding a piece of paper. What blockchain technology does, is it makes what you wrote on your piece of paper show up, nearly at the same time, on everyone else’s piece of paper, exactly how you wrote it. There’s literally a ledger of every single Bitcoin transaction in history. And because the network creates and cross-checks this ledger, no central authority is necessary. But this also means it’s hard to find anyone to appeal to if a transaction goes wrong. If I want to operate in a community where the money is completely anonymous, and I might get cheated, and it’s my problem to take care of. Fine. Right? But, sooner or later, your grandma is going to press the wrong button on an email, and all of her money is going to be transferred to somewhere in Eastern Europe. So what does this mean for the future of money? Bitcoin’s more anarchist features, like the near-anonymity, the lack of central control, suggest it’s probably a long shot to replace the dollars in your checking account. But people who study the technology that powers Bitcoin say blockchains will likely change how the world does business. 2027, it’ll be everywhere. They’re going to permeate everything we do. Many of the programmers working here with Joe Lubin are betting on a future where blockchains will make it so that complicated, paper-intensive stuff, like opening an account, or renting property, or getting a loan— stuff that normally takes days or weeks— could be done instantly. If you’re trading a piece of land for money, perhaps, there’s no reason why it can’t clear and settle in the moment of the transaction. In places where the financial system already works fine, this means banking could get a little simpler, cheaper, harder to hack. But for nearly 2 billion people in the world who, right now, can’t get bank accounts at all, the stakes are a lot higher. Just look at what simpler, cell phone-based banking has done in places like East Africa. If you’d previously had to spend four hours, on a bus journey and standing in line, to go and pay your water bill, and now you can pay it in a couple of seconds on your phone, your life’s completely changed. Technologists say blockchains are likely to transform far more than money. If you’ve got something valuable, a birth certificate or passport, stock or property deed, you may soon be using a blockchain to find it, check it, or sell it to somebody else. You can think of a blockchain, or a distributed ledger as a golden record of the truth. These technologies are about to disrupt every industry that has been based on trust. Predictions like this have touched off something like a digital gold rush. Investors in 2016 poured more than one billion dollars into new cryptocurrency and blockchain projects, on the belief that the technology could simplify trust-based transactions that so many of us need to do. But that future comes with some risks. Digital assets that aren’t backed by gold, or governments, only have value if people keep believing they do, and only if the computers creating them remain secure. And one of the most far-reaching risks goes back to a dilemma that comes built into Bitcoin. It is, in some ways, the most private financial system, and, in some ways, the least private financial system. You can just be a series of letters and numbers, and nobody will know that was you sending the money. But once somebody does tie you to that serial number, they know everything that you’ve done. Putting still more aspects of our lives onto blockchains— like property records and debts, identity documents, and medical or criminal histories— this could vastly cut down on the red tape in our lives. But it could also vastly simplify efforts to track our every move. With access to great amounts of data comes the responsibility to use it ethically. So, if we wind up in a society where there is a single computer record for every single thing in the society, and those records are kept in perfect order, that might work quite well in a modern liberal society like Switzerland. The problem is, if something goes wrong, welcome to your authoritarian superstate. The virtues that we want to preserve are virtues that we’re going to have to consciously fight for. Because the technologies themselves don’t bring those values with them. If you want those technologies to have those values, you have to bring them yourself. This suggests that the future of money may well be multiple. Different systems that embody different values about privacy, convenience, or community that different groups want to preserve. The rituals of Yap’s heritage persist because they represent values the community here wants to maintain. Islanders may use dollars at the grocery store, but stone money still has its place in ceremonies and exchanges that reinforce social ties. And that’s why it will likely endure, no matter how central blockchains become to the financial system. If we are moving into this era where the money itself is much cleverer, and the money is much more closely linked to communities, that makes money work in very different ways. But the way of thinking about that is much more where we came from.