A group of householders in Shandong province in eastern China got fed up of random motorists parking their cars in front of their residential estate.
So they secured the entrance with a chain made out of 66 separate padlocks linked together. Each householder kept one key to one lock. This meant that no outsider could undo the chain, but any householder could.
The scheme was hailed as a physical example of the digital development known as “blockchain.” But I think the incident’s real value lies in the way it provided a clear visual illustration for decentralized control, something hard to explain to people.
A month ago, this columnist spent time talking to digital currency enthusiasts. Their jargon level was so high that their statements – at least to me – no longer qualified as English. Typical sentence: “We were busy making Merkle Trees when Mount Gox disappeared and caused the Degens to race for faucets.”
Notice how much that sentence sounds like children’s fantasy? The cryptocurrency world, anyway, was largely developed by nerdy, otaku American and Japanese males, which pretty much explains everything.
In their world, the bad guys are the “Degens,” which one popular bitcoin online dictionary defines thus: “Degen: Shorthand for ‘Degenerate.’ Degen trading or Degen mode is when a trader does trading without due diligence and research, aping into signals and FOMO into pumps.”
“Aping into signals?” “FOMO into pumps?” Explanations simply wrap enigmas in other enigmas.
One term I initially identified with was “Cold Wallet” which I assumed referred to purses like my own – empty and unloved – but actually turned out to refer to data storage devices kept offline.
Mount Gox was long for Mt. Gox, one of the first bitcoin exchange websites where you could switch between bitcoin and real money. A digital security problem caused it to implode in 2014, taking a fortune with it. These days, the destruction of Mount Gox is spoken of in hushed, mournful terms, like Mainland Chinese people saying “Remember Nanjing” and Americans saying “Remember the Alamo” and my wife saying: “Remember the time you left the top off the Grand Marnier.”
And a “Merkle Tree”? According to CoinGecko, a cryptocurrency data aggregator, “It is a tree where every leaf node is labelled with cryptographic hash of a data block, and every non-leaf node is labelled with the hash of the labels of its child nodes.” Er, right, thanks. Perfectly clear…
Despite the total impenetrability of the jargon, I did find three cryptocurrency terms that were so useful that I think we should steal them for use in normal financial discussions.
- When any discussion becomes too complex or esoteric, you simply type “ELI5.” This stands for “Explain Like I’m Five” and causes participants to re-explain the topic in extremely simple terms.So if someone is talking about a “bond-linked instrument offering a 4 percent annualized yield,” you simply say “ELI5” and they have to explain it like this: “Daddy took your $100 birthday money and gave you an IOU for $104 you can cash in on your next birthday, sweetie.”
- The second useful term is “faucet,” which refers to a place you can go to regularly for dependable rewards. Example: “You’ll never get any investment cash out of X but her rich Uncle Ken is a total faucet.”
- The final one is the term “When Lambo,” which is a time reference. Derived from the name of the pricey Lamborghini sports car brand, it defines the moment when you become rich.
“When will my investment mature?”
“Looking at current trends, this project has a When Lambo of 18 to 24 months.”
But going back to that gated estate of homes in Shandong province, I’m sure most bitcoin enthusiasts would laugh at them for using mechanical devices like padlocks instead of some sort of digital security system.
Well, electronic systems are all very well – until you have a power cut or some other technical problem.
Remember Mount Gox.
Nury Vittachi is a bestselling author, columnist, lecturer and TV host. He wrote three storybooks for the Institute, May Moon and the Secrets of the CPAs, May Moon Rescues the World Economy and May Moon’s Book of Choices
