Money Reimagined: COVID-19's Lessons in Innovation

Though its impacts are deadly, the coronavirus is a product of an advanced innovation ecosystem. We can learn from its ability to mutate and adapt.

AccessTimeIconMay 1, 2020 at 4:51 p.m. UTC
Updated May 9, 2023 at 3:08 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Know your enemy. 

Epidemiologists and drugmakers are now living out that maxim as they frantically study the pathology of a virus President Trump calls the “hidden enemy.”

  • Why Bitcoin Miners Have Flocked to Texas
    Why Bitcoin Miners Have Flocked to Texas
  • Neil Tan: Hong Kong’s Crypto Push
    Neil Tan: Hong Kong’s Crypto Push
  • Bitcoin Holds Steady After China Rate Cut
    Bitcoin Holds Steady After China Rate Cut
  • Sam Altman's Crypto Project Worldcoin Gains Some Traction in China
    Sam Altman's Crypto Project Worldcoin Gains Some Traction in China
  • But learning about COVID-19 shouldn’t solely be about building a medical weapon against it. We can also take lessons from it as a society. Contemplating the virus’ “success” can help us design a more resilient economy and prepare for the dynamic digital financial system of the future. 

    Before you write this off as the ramblings of a madman, note that biomimicry, or biomimetics – the study and imitation of nature to find solutions to complex human problems – enjoys a long and respected tradition. And, as per this Biomimicry Institute article, COVID-19 is a great entry point into the field. 

    You’re reading Money Reimagined, a weekly look at the technological, economic and social events and trends that are redefining our relationship with money and transforming the global financial system. You can subscribe to this and all of CoinDesk’s newsletters here.

    There’s a reason we habitually use words like “ecosystem” to describe economic systems. As with natural ecosystems, the complexity of an economy’s relationships creates relentless, unpredictable change. Yet, to thrive societies need stability – just as nature needs homeostasis. So, an economy’s success depends on its ability to adapt within that dynamic environment. 

    Photo by Emma Gossett on Unsplash
    Photo by Emma Gossett on Unsplash

    In living systems, the key to homeostasis over time is evolution. The survivors of a disruptive change will be those members of a species with mutations that resist the threat. Those traits are then passed on through reproduction. Similarly, economies adapt to disruption and change by evolving – in essence, by innovating, and adopting new models. Those with the best foundational structure to innovate/evolve will thrive over time. 

    This is where viruses are especially telling as biomimetic subjects. With a singular purpose to exploit the cells of living beings to replicate themselves, viruses are in a constant state of mutation. It’s part of their ongoing evolutionary struggle against our immune systems, which are themselves constantly adapting, using antigens installed by viruses to produce antibodies that repel them. Sometimes in this randomized, hit-or-miss process, the virus gets the upper hand. COVID-19 is one such winner.

    An evolved powerhouse

    The COVID-19 mutation is so powerful because it’s focused on the social aspects of our existence. Two traits in particular have enabled it both to overcome millions of people’s immune systems and to disarm our most valuable disease-fighting weapon: our collective brain power.  

    The first is COVID-19’s highly contagious nature. The virus’ R0 – a measure of how many new infections stem from each case – was calculated by the Centers for Disease Control and Prevention at a median level of 5.7 at the height of the Wuhan outbreak. It’s aided by a pre-symptom incubation period averaging six days, with victims typically becoming contagious at some point before then. Up to 50% of all cases may be asymptomatic, which fosters a high propensity for transmission by oblivious carriers. 

    The second trait is more insidious: an inconsistency of outcomes that muddles our capacity to agree on how to respond. As New York City’s experience shows us, COVID-19’s estimated morbidity rate of 3%-7% of cases is high enough to overwhelm hospitals during outbreaks. Yet, for the vast majority of otherwise contagious patients, it’s virtually harmless, encouraging complacency toward social distancing and, in some places, outright “lockdown rebellion.”

    Photo by Fusion Medical Animation on Unsplash
    Photo by Fusion Medical Animation on Unsplash

    If COVID-19 were like the current-season flu, with a death rate of around 1%, our health system could have managed the patient load without quarantines and we could more safely have started the clinical trials needed to develop a vaccine. Conversely, if it were as brutal as, say, the 2014-2016 West African Ebola outbreak, in which 40% of victims died, there would have been overwhelming support early on for a total lockdown. 

    Both a vaccine or total lockdown would have stopped the virus in its tracks, frustrating its replication ambitions. But COVID-19 allowed neither. In occupying the middle ground between harmless and lethal, it outwitted our collective decision-making systems. It’s as if COVID-19 ran a highly effective disinformation campaign.

    Lessons in innovation

    What can we learn from this remarkable phenomenon? What conditions do our economic and social systems need to adapt to such threats? How do we redirect factories and supply chains toward needed production and keep incomes flowing during times like this? How do we optimize our economy’s adaptive, innovative potential?

    When venture capitalist Marc Andreessen laments our incapacity to “build" or journalist Jon Stokes observes that our economy is built for just-in-time efficiency but not for resilience, they’re describing an economic model that’s not optimized for innovation. We must strive for Nassem Taleb’s ideal of an “antifragile” system, a quick-action economic immune system with agility, backups, alternative paths to delivery and capacity to rapidly pivot. It requires a framework conducive to rapid-response innovation, to the societal equivalent of virus-like evolution.  

    Such a system must be open. It must allow the greatest variety of ideas a voice and a clear pathway to potential deployment. To continue with the metaphor of evolution, we’re looking for the widest possible gene pool, a big primordial soup from which the new life of innovation can spring. The answer lies in an open, decentralized, permissionless system. 

    Towards permissionlessness

    To understand the power of “permissionlessness,” look to the history of the internet. Applications built on open-access protocols such as TCP/IP for data-switching, HTTP for websites and SMTP for email proved overwhelmingly more popular and successful among both developers and users than closed online systems such as France’s Minitel and AOL. In the race to survive and thrive, the permissionless internet, which now boasts more than three billion users and more than a billion websites, easily out-evolved the corporate- and state-permissioned environments of those “Intranets.”

    Photo by Dan Meyers on Unsplash
    Photo by Dan Meyers on Unsplash

    The permissionless ideal was tarnished in the post-millennial Web 2.0 era, as Google, Amazon, Facebook and other powerful gatekeepers took control of the internet’s data, the digital age’s most important commodity. Hope now lies in a Web 3.0 phase founded on decentralized protocols inspired by cryptocurrency and blockchain models. These offer a vision in which no one needs permission from any one entity to exchange money, data or any other form of digital value. 

    Yet, here, too, tension persists between permissionless and permissioned models. The latter is more easily scalable at this early development stage and companies and governments are reluctant to cede control. (For the sake of simple illustration, we can say decentralized blockchains like Bitcoin and Ethereum are permissionless while Walmart’s distributed ledger supply chain system is permissioned.)

    Humanity's interest

    Now more than ever, as the COVID-19 crisis accelerates the arrival of digital, programmable currency and open blockchain solutions, the economic advantages of permissionless systems deserve a sound hearing. 

    So far, China’s Blockchain Service Network (BSN) and Digital Currency Electronic Payments (DCEP) system seem miles ahead of the rest of the world. But while the BSN’s designers wisely allowed for interoperability with permissonless blockchains and assets, the system’s ultimate gatekeeper will always be the Chinese Communist Party. 

    Here lies the West’s Internet 1.0-like opportunity to out-evolve China. In the 1990s, the United States actively promoted an open internet. Western allies now have a similar opportunity. They can create a regulatory environment that fosters permissionless standards for exchanging digital money and data, allowing developers to integrate useful applications into an open, digital financial system. 

    Yet, the ultimate goal is not to beat China per se.

    The pandemic has revealed the shared dangers we face in the absence of a robust, adaptable economic and social system for dealing with such threats. Supporting the evolutionary power of a permissionless system is in all of humanity’s interest.

    Springtime in here

    Unless you’re spending quarantine under a rock, you would know bitcoin has been on a tear. What you might not know is that this is the fifth consecutive year bitcoin has rallied in April. The repeated trend, which tends to continue into the first half of May, has even spawned a meme: the “Consensus Pump.” That’s a nod to CoinDesk’s annual Consensus event, the most important crypto conference of the year, in the second week of May. (I shouldn’t need to say this but, to be absolutely clear, CoinDesk’s editorial team is in no way “pumping” bitcoin, and we make no investment recommendations.)

    Bitcoin's price in April, years compared
    Bitcoin's price in April, years compared

    It’s possible this pattern is merely a more extreme version of what often happens in the lead-up to summer on Wall Street, where an old stockbroker’s adage tells investors to “Sell in May and Stay Away.” Either way, I cannot deny the confluence of the price run-up and the bitcoin halving is making us even more excited to be putting on Consensus: Distributed, our entirely virtual version of the big event May 11-15. Register here.

    Global town hall

    A small Italian town has started creating its own banknotes. According to euronews and Associated Press, Enrico Fratangelo, mayor of Castellino del Biferno (population: 550), has been studying the idea for 12 years. But it was Italy’s severe COVID-19 lockdown that pushed him to launch the “Ducati” notes. “We decided to mint money to make sure the local economy could withstand the impact of the situation,” Fratangelo told the AP in an interview. In doing so, he was following a tradition of community currencies such as "the Brixton Pound,” the “Ithaca Hours,” and the “Patacones” that Buenos Aires Province issued in the midst of Argentina’s crisis. Sometimes, these ideas are founded on “local-first” movements to keep money inside the community; sometimes it’s out of desperation, when cash shortages demand a new medium of exchange. Either way, it’s a concept ripe for a COVID-19-era move toward programmable digital currency, combining a backlash against failed centralized power and desperate needs for liquidity with the power to create money out of software. Already, blockchain ventures like Bancor are building tools for communities to issue digital local currencies

    20 Ducatis, with permission
    20 Ducatis, with permission

    As talk of digital fiat currency grows, “programmable money” is becoming a buzzword. But what does it actually mean? Antony Lewis, author of the acclaimed “The Basics of Bitcoin and Blockchain,” has made a useful stab at defining the taxonomy. Lewis, who recently left bank-led distributed ledger consortium R3 to join Singapore-owned Temasek, makes the critical point that the mere existence of a computer interface for payment commands is insufficient for money to be “programmable.” What matters is that no third-party computer, such as a bank’s, can interfere with the coded commands from payer to payee. It’s a prerequisite for what he smartly calls “designer money.” To me, what ultimately matters is for the payer and payee to trust an intermediary won’t intervene in their transaction. So I don’t yet agree with Lewis that “programmable” can’t apply to stablecoins that are managed by blockchain-based smart contracts whose logic allows them to block the payment in special cases. By that standard, a central bank digital currency would not be programmable, either. Maybe the jury is still out. It will depend on whether users sufficiently trust the model to use them programmably. 

    A big deal, folks: China’s Blockchain Services Network has launched. After CoinDesk’s David Pan broke important news on the makeup and key players behind the BSN and we published a pro-BSN opinion piece by Fudan University academic Michael Sung, some on Crypto Twitter scoffed. “It’s not a blockchain,” some said. “We already have bitcoin,” others added. For sure, what China is building is a long way from the permissionless, governmentless vision behind bitcoin. And, as I argued above, permissionlessness should ultimately win. But to dismiss this grand project as dead on arrival is dangerously naive. The design, with its use of Hyperledger and Cosmos technology to build an interoperable framework and toolkit for companies and cities to cheaply and easily build and interlock their operations, is quite stunning for its scope. Yes, it could enable a frightening “panopticon” surveillance apparatus – despite privacy promises from BSN architects. But that doesn’t mean it won’t succeed in driving an economic leapfrog. Whether we like it or not, China is leading the way in reimagining money.


    CoinDesk Live: Lockdown Edition continues its popular twice-weekly virtual chats via Zoom and Twitter, giving you a preview of what’s to come at Consensus: Distributed, our first fully virtual - and fully free - big-tent conference May 11-15. 

    Register to join our sixth session Tuesday, May 5, with speaker Amy Davine Kim from the Chamber of Digital Commerce to discuss upcoming guidelines from the Financial Action Task Force, most notably the Travel Rule, hosted by Consensus organizer Aaron Stanley. Zoom participants can ask questions directly to our guests. 


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.