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Over the past week as I've been summarizing and giving my thoughts on David Schwartz' new podcast, Block Stars, I've been thinking about how and whether or not blockchain will ever be a ubiquitous standard for the digital age. After all, the current global economy hasn't yet required blockchain to function, and most of the crypto market is still quite niche.

Under the hood of all this, however, Ripple has been slowly but steadily building a network of partners around the world—financial institutions which are eager to get ahead of the competition, especially with regards to global remittances. Every week, it seems, a new company or bank signs up on RippleNet, and begins to make use of their technologies.

Then, I got an email from Coinbase saying that there was a chance to earn a new coin on the exchange, called Orchid, as part of their educational series that helps customers learn about different digital currencies while earning it for free. Obviously, since it was basically like getting free money, I decided to go ahead and watch. But, as I was watching, the idea of interoperability and cryptocurrency finally clicked.

The Origins of Money

Let's go back to the origins of money. All the way back, when civilization first dawned, and trade began, humanity faced an interesting problem. As people began to produce a surplus of food, they realized they could trade and barter it for other goods that would make their lives easier. In order to trade, however, there was an issue of how to quantify the goods. After all, how many fish is a stool worth? How do you quantify an expiring good versus something that lasts for months or even years?

And so, the idea of money was created—a medium by which people could interoperate between different goods based on an agreed upon value. Whether using conch shells or gold, everyone could now become part of an exchange, even when their goods have qualities that weren't comparable to others.

But, of course, the creation of a new technology to solve any problem will almost always result in brand new problems that need to be dealt with.

The Whole is Greater than the Sum of its Problems

The first problem is that human government became the bedrock on which these currencies were defined. Even before the idea of a “central bank” or “federal reserve” was created, ancient societies like the Roman Empire and Bronze Age Egypt controlled money through the auspices of a single, imperial polity. Even when democratic and republican governments became the norm in the 'western world', central authorities were still given the ability to tell people what money was, and how to spend it, justified by ideas like security and safety.

And second problem was that, because people of different creeds and cultures have their own preferences in who they trust and who they want to deal with, thousands of different currencies began to develop. While a gold standard did become more widespread in the 19th and early 20th centuries, that was abandoned, and it is unlikely that it will ever come back as such in the future.

These two problems compound on each other. Since governments can define what is money for their citizens, and because it is difficult for the average person to freely exchange their value to others not within their immediate locale, the often unwise monetary decisions made by such central authorities have devastating effects on a population. Examples today can be seen in Venezuela, Zimbabwe, and other countries in which their governments basically destroy their own society by over-inflating the supply of valueless currency, and then prevent their citizens from trading with the wider world in order to keep their wealth.

Interoperability and Blockchain Services

I want to go back to what I was talking about in the beginning. I think Orchid, and its cryptocurrency OXT, is a great example of how interoperability could be a key to a new, and better, economy.

Orchid is a service that behaves much like your basic Virtual Private Network (VPN) service. VPN's have lots of different uses. They can mask your IP Address to give you a bit more privacy from both public wi-fi and even your home ISP. They allow you to access parts of the Internet that may not be available to normal geo-locales (e.g. browsing Youtube in China). They can even be used to get less expensive services, like flight tickets, which usually go up in price each time you check them without purchasing.

Usually, you have to pay for a third-party VPN service. This is because free ones actually sell your internet usage to advertisers and other companies, which basically defeats the purpose of having a VPN in the first place (for most people).

Orchid hosts its VPN service, and receives payment for it in the form of its OXT currency. So when you want to use their service, you basically go into their app, sign into their VPN using their coin, and away you go.

Hundreds or perhaps thousands of services like this exist in the real world. From VPNs to Vending machines, from fast food restaurants to grocery supermarkets, from gaming services to the film industry, each of these has its own incomparable qualities and value. Each of these industries have the potential to, themselves, develop niche currencies to use.

This already happens in the real world. I can go to the grocery store and browse through their gift card section, and find hundreds of cards, ranging from Starbucks to Red Lobster, to even a blank Visa debit card. But, importantly, none of these cards are interoperable.

I often have $0.17 left on a Starbucks gift card, about $1 left on a restaurant one, and a few others at other points. What if I could take all that value, put it on a single card, and spend it at a business of my discretion?

This, I believe, is the promise of blockchain interoperability.

Bringing Interoperability to a New Level

Again, since blockchain and cryptocurrency has been around for some time now, some of this exists already. For example, I can currently take my OXT and convert it into BAT, send it to my BAT wallet inside my Brave Browser, and tip and support Wikipedia, or my favorite Youtube creator that has BAT tipping enabled. That creator can then take the BAT, convert it into a gift card for Starbucks, and go buy himself a coffee.

Think about that for a second. That's already pretty insane.

But there's a next level service layer that can exist that, as far as I can see it, will be the next area of fierce competition after the current DeFi craze has settled down.

This is because, as given above, there's so many little steps that I need to take in order to do what's described. I need to take my local fiat, convert it to cryptocurrency, and then send it to another wallet, and then use that wallet's service to send it to someone else's wallet. That's a lot of steps, and not a friendly user-experience.

But what if there was a service that could do all of that for you, at the press of a button, without needing to constantly sign into multiple services across lots of different apps and websites? China's WeChat super-app is pretty close to this, but we all know how invasive and oppressive that has been. Instead, a service like this built on decentralized blockchain technology is not only censorship-resistant, but would enable everyone around the world to exchange value, no matter what venue or service they start from.

Whoever or whichever company is able to achieve this level of integration and interoperability with their services will likely be the next Amazon.