The dotcom era of the early 2000s raised apprehensions about the future of music industry. The possibility of instantaneous shareability and duplication of music files was seen as a threat to big labels built during the 90s.
Since then, we have seen that the music industry has not gone anywhere, even its big labels - but instead of few big rockstars commanding global audiences, there are multiple musicians of mini-rockstar status having their own mini community audiences. The musicians continue to make as much as they would have even in the pre-dotcom era, but the internet medium disintermediated the big labels and demolished gateway services, while enhancing music diversity as more and more artists could launch themselves independently without the step up required from big labels.
With the help of Web 3.0, the same internet could now be a fermenting ground for a parallel in the international financial system where the US dollar dominance is expected to be slowly eroded by multiple forms of digital currencies - each with their own mini-communities as their users.
The predominance of dollar in the existing IMF system, despite global US trade having reduced from a quarter of the total in the post-world war II economy to around 8% now, has produced several roadblocks to other economies and their growth. This is because of the difficulty in accessing dollar credit for developing international import-export infrastructure and the inability of weak national currencies to compete in the international market.
Despite its reducing relevance, US dollar’s dominance has been maintained because of US dollars’ attraction as a reserve currency. Countries are incentivized to maintain US dollar reserves because of the convenience it provides in international trade because of its high liquidity, which is a direct consequence of the US dollar's strength and stability as a currency.
If I sell a product for 5 US dollars, and get it settled and cleared for payment 6 months later, those 5 US dollars would continue to have the same purchasing power as on the date on which I sold the product. That's why I would prefer US dollars over a national currency which can fluctuate widely, especially if I am trading with fragile economies.
At this point it is relevant to talk of ambient accountability, i.e., ability to access real time settlement and clearance data instantaneously, which is possible with a technological architecture comprised of shared and distributed ledgers, smart contracts and APIs which deliver instantaneous data and help avoid long wait times till the end of the settlement or reporting cycle to know the final state of data.
With the help of ambient accountability, we could be capable of facilitating instantaneous settlement of digital currencies through pre-defined algorithms. These algorithms would exchange multiple digital currencies at a very high rate, while instantly clearing and settling them on shared and interoperable shared ledgers. So, if I wanted to sell a product for 5 US dollars, I could sell it at INR 375. With the help of ambient accountability, pre-defined algorithms would be able to instantaneously convert, clear and settle the payment of 5 US dollars through a network of crypto trades on exchanges and reflect INR 375 in my digital wallet. Once this architecture is built, countries may not US dollar reserves as instantaneous settlement with the help of ambient accountability would mean easy liquidity and fungibility of whatever national currency that I prefer, without the fear of losing purchasing power.
This could be a direct threat to the dominance of US dollar. David Birch’s book explores several other threats as well, such as corporate digital currencies, for e.g., Libra, public digital currencies such as DCEP, which is the digital yuan issued by China. Birch highlights the rising discontentment among certain parts of the world because of difficulties faced by them as a result of US sanctions and restrictions. He delves into the impending currency war that could be fought through the cyberspace – after gradually laying down various formative concepts fundamental to understanding the emergence of the new landscape. In that sense, this book will be helpful to the reader in understanding the difference between e-money, digital money, e-cash. It will also take you through various experiments in the past and the reasons or their failure, while aiding you in appreciating the problems the latest experiments with digital currency is expected to solve. Birch also dismisses the argument of criminals’ use of crypto against digital currencies, while highlighting the potential of mixing services in aiding money laundering.