There was a time, many years ago, that the catholic church, the religious institution that in many ways inspired the culture of what has become known as ‘The Western World’, spoke out strongly against what was known at the time as “usury”: the charging of interest on loans for the purpose of profit.

Over time, the definition, and therefore, the “sin” of usury has changed somewhat. Before being broadly accepted, the simple act of charging interest on lent money was considered inherently sinful; taking advantage of the poverty of others for the already-wealthy to become even further enriched. In modern times, usury is more strictly considered to be the charging of exorbitant or predatory interest rates designed to further impoverish borrowers and trap them in debt, to the benefit of the lender.

Islam has also historically been broadly opposed to usury. So, the two largest world religions, globally dominant in terms of adherents and cultural influence, have been pretty clear over time about their stance when it comes to the concept of usury.

Yet, our entire financial system, spread across the globe, is based on this very concept. To be fair, it is this system that enabled the greatest growth in wealth, quality of life, and economic progress in the history of humankind. Yet, there is a big problem at its core; we live in a system that is designed to operate with inescapable debt hard-wired into its structure.

The burden of inescapable indebtedness has multiplied exponentially with the advent of fiat money as the currency of the global monetary system. Take a moment some time to watch the U.S. National Debt Clock, counting up continuously, with no end in sight. It is a frighteningly massive, depressing, and somewhat incomprehensible stream of ever-increasing numbers. Some will say the solution to this problem of debt is a matter of tightening purse strings, managing funds more wisely, or taxing more fairly. None of these solutions will ultimately work, however, because the entire modern system of fiat money is predicated on debt existing and never being fully “paid back”.

For a brilliant yet succinct explanation of the inception of money as a tool for the creation of indebtedness on a grand scale, Yassine Elmandjra created a series of Tweets that simply should not be missed. At the heart of it, the message is clear: money as it is created today is made out of thin air, bought in exchange for indebtedness to private parties, who then charge interest for its repayment.

There is a pretty significant problem with this arrangement that nobody ever seems to think about:

If the money is created out of debt, and can only be paid back with more money created out of debt, how can the debt ever really be paid in full?

Short answer: it can’t.

Thus, the modern system of monetary creation via debt is doomed for failure. It could take years, decades, or even centuries, but it is at some point unsustainable.

It is into this broken system that cryptocurrency enters as a potential tool by which one can make amends for the “sin” of usury. Bitcoin, among many other cryptocurrencies, is not made from debt. It is a result of work. Granted, money must be spent in order to acquire the necessary equipment for the mining and generation of the currency. However, since the currency itself is not issued out of debt, no private entity like the Federal Reserve, for example, stands to gain from charging interest on money that would otherwise be made out of thin air. Instead, the money is awarded to those who produce the work, in the form of enormous calculations working to solve mathematical puzzles to achieve consensus through a method called Proof-of-Work, a mechanism that is necessary for its creation.

Perhaps this is why, some time ago, it was determined that Bitcoin is compliant with Sharia law. In fact, one could argue that the creation of money via tools like Proof-of-Work consensus is far more compliant with principles of monetary justice — principles that go beyond the confines of any particular religion — than the current monetary system, which entirely depends on the indebtedness of all users, save for the few original issuers of the money and their closest friends and allies.

That’s not to say that Proof-of-Work currencies are the only manner by which cryptocurrencies might disrupt the modern monetary system. Many forms of consensus that are potentially far more efficient than Proof-of-Work are in use by cryptocurrency technologies. The key distinction? These currencies offer the possibility of a different kind of money — money that, upon its issuance, does not immediately cause the user to be indebted to the issuer, but instead allows the user to enter into the financial ecosystem with a capacity to freely participate without debt.  

Perhaps the time is coming that the world can make amends for the egregious “sins” of debt and usury. Reflecting on these principles, it becomes clear that cryptocurrencies could indeed cause a paradigm shift in the way the world interacts economically, much to the chagrin of those who currently hold the reins. This newfound technology has the potential to move the global economic system away from indebtedness and usury to a new form of exchange and economic interaction that does not depend on the infinite creation of debt to flourish.