I'm not going to sugarcoat it for you, so here we go: money is tokenized trust. That's all there is to it, really.

Money is not a piece of paper issued by a government, it's not a kilogram of a yellow metal, it's not even a cryptographic signature recorded in a digital peer to peer ledger. Money is none of that, although we use all of these representations of it in our daily activities.

Money is a function of trust, distributed over a population of actors, in a time-space bound context. Ok, I may have jumped a little with that definition, and probably said more than I had to, so I'll stop here (and I may come back in a future article to detail all this).

So, back to the title: staking is the new mining.

I am fortunate enough to remember a time when I was able to mine Bitcoin on my laptop. Didn't mine a lot, because, at that time, it didn't seem very attractive. The majority of trust was deposited in other venues. I was generating more value by coding for various clients, or, don't laugh, even by teaching tango (yeah, I ran, for a short period of time, a small tango school). But I do remember how was to mine coins on my laptop.

Then ASICS came, a piece of hardware that was better at mining than the software. Then mining farms appeared, most of them in China, or in Northern countries where electricity was cheap. Then mining farms colluded in big mining syndicates and, in just a few years, we reached a tipping point.

That tipping point represents the end of a trust trend. Generating tokens via solving useless mathematical problems suddenly doesn't seem so viable anymore. Why? Because we already have a lot of those tokens floating around. There are literally thousands of them, in hundreds of different peer to peer ledgers (or blockchains, if you want to call them like that). So we have a better place to place our trust now: the tokens themselves. We have poured enough of it so we all agree that vouching with them is relevant.

Minting tokens via proof of work is becoming limited. It may continue to function for a while, but it will be more and more marginal. Its place is slowly, but firmly, taken by a much more subtle process: staking.

Simply put, staking means I'm blocking the value that I already minted, and with that I'm signaling support for a certain process. I'm literally vouching with my wallet. The more I put into, the more rewards should I receive. Just like, with the mining, the more computing power I was deploying, the bigger the chances to discover a block.

But make no mistake, what I'm really vouching with, is my tokenized trust.

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There is an ongoing funding proposal for two of my Hive-related projects, which will allow me to support some of the costs involved. If you want to support this proposal, all you have to do is to vote it using any of the two links below:

Sign this proposal with Hivesigner Peakd: https://peakd.com/me/proposals/92

Already supported by: @toofasteddie, @amico, @bluerobo, @chrisaiki, @erikah, @ervin-lemark, @ew-and-patterns, @guruvaj, @mytechtrail, @pharesim, @ryivhnn, @sacrosanct, @captainklaus, @santigs, @inertia, @bro.poker, @distantsignal, @doze, @gadrian-sp, @shmoogleosukami, @valued-customer, @condeas, @justinashby, @likwid, @bucipuci

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I'm a geek, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Hive you may stay updated by following me @dragosroua.

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