Edward DeBono, the Precursor of Bitcoin Died

Edward de Bono, scientist and writer, inventor of the concept of “lateral thinking”, died on 9 June 2021, aged 88.

In 1994 he proposed the famous concept of IBM dollar, which is a bit like the father of bitcoin, in several ways:

  • It would be private money, not controlled by the state. Basically IBM would issue their own currency.
  • It would be essentially a claim on products of IBM like PCs.
  • It would be an intermediate thing between buying computer hardware and buying IBM stock. The author considered several variants of how this would work. In essence it would be like buying not the current but some future product from IBM.
    • As such, DeBono considered the risks: like IBM next computers could be bad or the company would collapse.
  • It would be an investment similar to a zero-coupon bond.
    • In the case of IBM it would be a high-tech investment, based on rapid advances in technology, basically holding it would be a bet on the future of technology and business.
    • IBM was viewed – at the time – as a key company capable of conquering the world or/and shaping the future of business and also of course capable generating substantial profits.
  • DeBono did not consider that banks were needed here.
    • He stressed that this would be a cheap, and simple way for IBM for raising money. Thus probably without any intermediaries or financial services incumbents endorsing this currency.
    • It would be a new and direct financial circuit, based on trust between a large company such as IBM, and their customers, who would buy and hold these tokens.
  • There was an element of customer choice, people would have a choice, and keep and use those currencies issued by companies they have chosen and they trust.
  • DeBono proposed that this type of instrument could be used to invest into selected sectors of the economy without causing inflation.
    • We need to think about it today when US and Europe are trying to boost or regain the telecom and silicon industries which went to Asia. Ethereum is also like this: you buy ETH, there is a shortage of GPUs to mine it, and new semiconductor making factories are being built.
    • Both bitcoin and ETH are like what DeBono thought IBM dollar would do. They preside over this type of crazy monetary expansion, happening at unexpected places outside of the normal financial system, which allows investors to invest or over-invest into high tech industry without causing inflation.
  • The author also thought that in general, an economy with multiple currencies would be more resilient.
    • He anticipated that there would be more than one such token in circulation.
    • It could be issued by any company which makes popular products and has a solid reputation.

This last component is maybe missing today: IBM was a rock solid industry player for a very long time. In contrast very few crypto companies have some sort of solid reputation and intrinsic market value outside of making crypto currency itself. Many crypto coins of today are bound to collapse tomorrow. Ethereum and Bitcoin are incredible and they are champions of the “network effect”, but their dominance is not certain, as their deficiencies are widely known. If so, tomorrow other crypto coins can easily dominate. Like Internet Computer, emerged in no time out of limbo, and already is one of the major players.

So far proper industry firms such as say Apple or Samsung, or proper customer-facing large businesses such as Starbucks, have not issued crypto currency. Swiss banks did not either. Only Facebook announced it will issue crypto currency, however Facebook does not make things which people want to buy, they are an opportunistic data-hungry troll factory aiming at controlling the whole world, and their reputation is not great. So as a matter of fact, we are still looking forward to see the IBMs of our times to actually issue some digital currency and fulfil the dream of DeBono. This has not yet happened.

Remark: If GPU makers NVIDIA and AMD profit from the crypto currency prices going to the moon, they do not officially endorse crypto currencies or not yet.

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