The author of a sweeping history of money is ready to make his own mark on that story.
Last week, it was announced that British historian Niall Ferguson would join the board of Ampleforth, a new blockchain protocol that aspires to be a reliable store of value. If a historian advising a crypto project seems strange to you, maybe you should read more. Formerly a professor of history at Harvard, Ferguson is currently Senior Fellow at Stanford’s Hoover Institution and Harvard’s Center for European Studies, and author of fourteen books, including The Ascent of Money, a sweeping history of the financial system that should be required reading for any crypto-watcher.
He has also helmed widely-praised BBC history series, including a televised version of The Ascent of Money if you haven’t got the bandwidth for the read. As if that weren’t enough, he’s a frequently outspoken political gadfly, with positive takes on both Brexit and Donald Trump.
Ampleforth aims to create a global currency that resists both the volatility of bitcoin and the political risk of fiat money, by using an algorithm to balance supply and demand. That may sound a bit like algorithmic stablecoin projects like MakerDAO and the now-folded Basis, but Ampleforth insists it’s something new. We’ll be keeping an eye on the project, but we were interested in getting Dr. Ferguson’s broader thoughts on crypto, so we sent him some questions via email.
You’ve written perhaps the definitive history of money as a technology, and its social impacts. What do you see as the defining advances cryptocurrency makes over money as we’ve known it?
I would be wary of assuming that huge advances have been made thus far. Compared with what was promised just over 10 years ago, when bitcoin was created, relatively little has been achieved. Our existing payments system is largely a relic of the 1970s. An alternative one is evolving in China which implies massive centralization of data and loss of privacy. The rapid centralization of the internet by network platforms in the West was in many ways a disastrous development.
“So far, the most important contender to be a “cryptocurrency” has been bitcoin. And bitcoin itself is only money in a very limited sense, which I would define as follows: It is an option on digital gold.”
As technology continues transforming how money works, we should be careful not to risk repeating those same mistakes. Reinventing money in a way that protects individual freedom is a hugely exciting project, and a necessary one. I remain attracted by the idea of a more decentralized world, which is part of the appeal of blockchain and other distributed ledgers.
So far, the most important contender to be a “cryptocurrency” has been bitcoin. And bitcoin itself is only money in a very limited sense, which I would define as follows: It is an option on digital gold. By this I mean that bitcoin’s role in the foreseeable future is as a liquid asset that is hard to confiscate, and thus serves as a type of insurance. You might hold your private keys the same way the European wealthy used to hold gold jewelry and precious stones. However, the experiment launched by Satoshi Nakamoto in 2008 is not yet finished. To own bitcoin today is to have an option on Satoshi’s experiment succeeding.
Source/More: Financial Historian Niall Ferguson Dives Into Crypto