Digital Currencies Part 2: What is the Difference Between Our Software and Bitcoin?

Bitcoin and its derivatives are the first generation (1G) of digital currencies. We're working on second (2G) and third (3G) generation systems.



Bitcoin, a pioneering effort in cryptographic currency, is getting a lot of press lately. Many people ask us, what is the difference between your software and bitcoin? Here's the answer.


Bitcoin is a Currency. That's It.

Btcoin is one possible implementation of a digital currency. It's not the only possible implementation. The bitcoin software, which is completely brilliant by the way, implements a digital currency that anyone can use. That's great. But that's all it does.

Our software implements entire economic systems. To do that, it does 3 things:

  1. Issues currencies. Our software issues digital currencies with any features you want. The rules your currency follows and the features it has are completely up to you. That means you can invent the rules of your economy. For example, you can create a currency that never inflates or deflates. It's actually not that hard. You can create a currency for your business. You can make currencies to solve social problems. You can create new forms of sound money. It's all up to you.
  2. Issues legal contracts with programming logic built in. That's right. Legal contracts can have programming logic built right in. That means that they can make deposits or withdrawals. They can send emails. They know when they've been breached. They know when to terminate themselves. As a result, you can build any kind of financial instrument (stocks, bonds, mortgages, etc) that you can think of and make it a legal contract. Our system processes your new financial instrument as if it was built into the software from day 1. You can build entirely new economies that utilize entirely new financial instruments without inventing new software. It's all there ready for you to use.
  3. Provides an extendable API. This is programmerspeak. It means that you can add new program code to our software. So if you want to invent a new form of money and new financial instruments that our software can't handle, it's not a problem. You can write your own program source code and plug it into our system. Then your currency and your financial instruments can use the features you added in your source code. Your innovative new economy just works.


Bitcoin is ONE Currency. Free Markets Need More.

Do you want a customized currency for your business? The airlines do. They call them "airline miles" but airline miles are just digital currencies. Amazon has its own digital currency called Coin. Most major retailers have "rewards cards" or "cashback programs" but these too are just currencies.

With our system, any business no matter how large or small can issue their own merchant-specific currency in minutes. Bitcoin doesn't do that. It wasn't designed to. That's not a negative. It's just a statement of fact. Bitcoin is a generic currency like the US dollar or the euro are generic currencies. If you want a merchant-specific currency like large businesses have, you can create it with our software.

Do you want to provide your city or state with sound money? You can. Your money can be backed by a bond (or other promise of tax revenues), gold, silver, oil, or whatever else you want. Our system can package certificates of ownership inside the digital cash it produces. So you can back your money with anything you want.

Do you want to transcend money itself? Our system can package certified IOUs inside of your digital cash. In that case, you're not using money at all. You're using credits. And you redeem your credits (which are just IOUs) by selling goods and services and accepting credits as payment. This kind of economy is great because there's never any inflation or deflation. Its decentralized nature means that there's no one entity in control. Free market principles apply to money itself. We've done some other blog posts on credit clearing co-ops and commercial credit circuits. These are liberating ways of doing business that function well even in a down economy.


Bitcoin is not an Economy

As I've stated, our software provides the infrastructure for entirely new economies. Bitcoin, as good as it is, only provides the infrastructure for issuing a currency. There are no financial instruments. There is no bank-like infrastructure. There's only a way to mint money and wallets to spend it with. While this was a giant leap forward, it's not enough to base the world's economy on.

Granted, the bitcoin infrastructure is currently being built. And a lot of people are doing a really good job of inventing an entirely new ecomomy. And this is exactly what we need if we are to create a sustainable world.

Our system is designed to create many competing currencies and many competing economies. People's freedom of choice and free markets will decide which ones survive. This is the "We the People" economy that is built from grassroots efforts of like-minded people. It's also the economy of free trade that organically comes together by people doing business in the most intelligent, innovative, and efficient ways they can.

In other words, our software is designed to promote economic freedom and democracy where everyone can choose for themselves and vote with their wallets.


Summary

Bitcoin turns the world upside down. It proves conclusively that we do not need governments to issue our money and manage our economy. We can do it ourselves and we can do it better than any government.

The software we are writing at Cognisaya takes bitcoin's basic ideas into the mainstream. It's a platform for issuing currencies, creating innovative financial instruments, and building entire economies that apply free market principles to money itself. We at Cognisaya are genuinely grateful to whoever wrote the bitcoin software. That may actually have been a turning point in the history of civilization. We hope that we can build on what "Satoshi Nakamoto" started and extend his ideas to create a platform that worldwide economic systems that scale from the smallest of the small to the largest of the large.

And that is the difference between bitcoin and our software.




© Cognisaya 2013-2015


                Home |  Products | Services | Blog | Articles | Videos | Links | About | Contact