Understanding Programmability
Programmability is the capacity of a computer or electronic device to follow instructions, distinguishing it from other devices. It encompasses the ability of a software program or hardware device to adhere to a set of coded instructions. For example, your keyboard may have programmed special keys to perform specific functions like muting the volume or adjusting screen brightness.
In the crypto industry, there has been a significant focus on expanding programmability to money itself, with the goal of creating digital, programmable currency.
To fully grasp the uniqueness of programmable money, it is important to consider the general characteristics of money. Traditional fiat currencies often rely on physical coins or banknotes, which have no intrinsic value. The value of a $10 bill, for instance, is determined by a central bank based on a shared system of legal rules. By using the dollar, individuals implicitly agree to abide by these rules.
In the digital realm, programmable money, especially in the context of cryptocurrencies, offers greater flexibility and the ability to establish entirely new rules. These rules dictate when, how, and between whom value can be exchanged. They can support various functionalities and automated use-cases, such as integrating smart contracts for managing payments in smart devices or streamlining business processes. Programmability opens up possibilities for reimagining transactions between different parties, including devices themselves.
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