The Speed of Transactions vs the Speed of Settlements - Lyn Alden

Alden reflects on the role of currency over history, and specifically focuses on the transactions and settlements as two different things, and how technology has affected them. Alden is keen to apply a technology lens to this, and extends to what we are likely going to need in the future.

Nature’s ledger (gold) has robust parameters for supply and debasement but doesn’t move and get verified fast enough in the telecommunication age. Mankind’s ledger (the dollar) moves and gets verified fast enough but doesn’t have robust parameters for supply and debasement. The only way to fix this speed gap in the long run would be to develop a way for a widely accepted, scarce, monetary bearer asset itself to also be able to settle over long distances at the speed of light. In other words, something like bitcoin.

An interesting read. The nuance of settlement is critical, and one that many forget. I know when I've shown people Bitcoin Lightning sometimes they say "Well, I can do that on Venmo." But no you can’t. Bitcoin settles immediately, the transaction is done. Venmo takes 1-3 days for the cash to move. It is a totally different thing built on top of the slow banking system.