Programmability implies that something is capable of following instructions.
Programmability implies that something is capable of following instructions — a capacity that sets the computer apart from other electronic devices.
Programmability therefore broadly describes the ability of a software program or hardware device to follow a set of coded instructions. If you take a look at your keyboard, you might identify special keys that are programmed to do specific things, such as muting the volume, changing the brightness of your screen, etc.
Within the crypto industry, there has been a lot of discussion surrounding how to extend this capacity to money itself: to create digital, programmable money.
To understand the distinctiveness of programmable money, keep in mind the general properties of money more broadly. When it comes to fiat currencies, it’s common to use physical coins or banknotes. As objects, these are in themselves worthless. The only reason why a $10 bill has value is due to the fact that it has been assigned that value by a central bank, which adheres to a shared system of juridical rules. Anyone who uses the dollar implicitly agrees to participate in these rules to abide by them.
Programmable money in the digital space, and especially when it comes to crypto, implies greater flexibility and the possibility of setting different rules altogether. These will define when, between whom and how value can be exchanged. Such new rules could support different functionalities and automated use-cases – for example the integration of smart contracts to manage payments for smart devices or streamline business processes. Programmability therefore opens the potential to reimagine how different parties — and even devices – transact with each other.