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"The price system [is] a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement."

— Friedrich Hayek

Crypto might be a better price system

Nathan Rothschild made his family's fortune by building the world's best information network.

He stationed agents across Europe to gather information for him and employed couriers, private ships and carrier pigeons to transmit that information far faster than his competitors — or even governments — could.

Famously, Rothschild made a killing in 1815 after a courier brought him news of Napoleon's defeat at Waterloo — he was buying British government debt at least a day before anyone else even knew there had been a battle.

A few decades later, traders in Paris gained a smaller but still significant informational edge by bribing the operators of France's optical telegraph — a system of hilltop towers with pivoting arms (pictured above) that relayed coded messages across the country in minutes.

Another century on, hedge funds paid NYSE and Nasdaq to place their servers directly next to the exchanges', gaining a microsecond edge over competitors whose machines were placed just a few feet away.

In short, markets have always been a race to get and process information slightly faster than everyone else.

But this isn't just about traders making money — it's about making the real economy more efficient, too.

When information moves faster, Adam Smith's "invisible hand" becomes more responsive — faster markets guide capital, labor and raw materials to where they're most needed with greater speed and precision.

A spike in copper futures, for instance, doesn't just reward traders who happen to be long; it also signals scarcity, prompting miners to expand production, manufacturers to search for substitutes and engineers to develop new efficiencies.

In short, faster information lets investors and business people make faster decisions.

This might be a use case for crypto.

Like Nathan Rothschild's network of agents and the optical telegraph of France, blockchains can be understood as information networks — or "price systems," in Hayek's terminology.

If so, the most optimistic take on crypto I can think of is that it might become an even better price system than the NYSE and Nasdaq server rooms.

In some ways it already is.

On Friday night, for example, when news broke that iPhones and other mission-critical electronics would be exempt from President Trump's tariffs, equity markets had been closed for hours, so the only thing you could do about it was buy crypto.

Then, on Sunday, when news broke that they wouldn't be exempt from tariffs, equity markets were still closed — so the only thing you could do about it was sell crypto.

In both cases, crypto markets received and processed the information on tariffs far faster than equity markets, the US versions of which remained stubbornly closed until 9:30 am ET Monday morning.

Even during the week, though, equity markets are usually closed when price-relevant information is first released.

That is mostly by design: Companies report earnings pre- and post-market to give investors time to process the new information before trading begins.

(Berkshire Hathaway even reports earnings on Friday nights so investors have two full days to mull them over before having to make any rash decisions.)

I suspect that is for the best, because if I learned one thing in my years as a market maker it's that nothing good ever happens when you trade outside of normal market hours.

But there's at least a theoretical case to be made that the economy as a whole would be better served if all information was reflected in market prices as fast as the speed of light.

Surprisingly, blockchains might be the way to do it.

Solana's North Star is to "reduce latency" and I was recently surprised to hear just how far Solana co-founder Anatoly Yakovenko intends to take this: "If a ship full of iPhones sinks in Asia," he told the assembled crowd at DAS New York, "it takes 80 milliseconds for your short sale to reach New York. With Solana it can go to a node hosted in Singapore."

I'm not sure the world needs to know anything less than 80 milliseconds after it happens — but if that container ship of iPhones sank on a Friday night, the world would have to wait two and a half days to find out just how price-relevant that is.

That's an eternity in the information economy we now live in, so financial markets probably need to do better.

Also, the information economy is only going to speed up with AI, so there might soon be some edge cases in which moving information from where it's produced to where it can be traded in less than 80 milliseconds will be useful.

This is the mission of Solana: As Yakovenko frames it, the Solana blockchain aims to reduce the time between when information is produced and when it's reflected in financial markets as much as the laws of physics will allow.

To accomplish that, Solana plans to have its nodes process information around the globe — giving it an advantage over the NYSE and Nasdaq servers that only process information in New Jersey.

It's a work in progress — Solana has not yet integrated the system of "multiple concurrent leaders" that would allow information to be processed closer to where it's produced.

But crypto is already speeding up finance.

In its recent form S-1 filing, for example, Circle makes the case for stablecoins by arguing that an "internet-native US dollar can increase the velocity of M2 money stock, resulting in a corresponding increase in total value of transactions and GDP."

Other crypto innovations such as flash loans, atomic swaps, automated market makers, streaming payments and real-time settlement may similarly speed things up.

And all of those things are happening faster as blockchains like Solana race to reduce latency as much as the laws of physics allow.

So, what happens if the speed and cost of moving both money and information falls to the speed and cost of moving electrons?

I don't know.

But if Nathan Rothschild was still in business, I'm sure he'd be trying to find out.

— Byron Gilliam

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