It started with the best of intentions: in 2015 a group of programmers inspired by the success of Bitcoin launched a new software platform called Ethereum that allowed users to conduct transactions without a central bank or currency authority using “tokens” called Ether instead of dollars or pounds. Even more exciting, their platform allowed for “smart contracts” so a deal could be made conditional in all sorts of ways, allowing for everything from options contracts tied to future commodity prices to elaborate corporate governance and voting schemes. Having developed this platform and—they thought—worked out the bugs, they decided to create the cleverest smart contract of them all: a “Digital Autonomous Organization” that functions something like a venture capital firm run by algorithm. In 2016 some 11,000 people crowdfunded the DAO with over $150 million in startup funds, many of them developers who had contributed to the core open-source Ethereum codebase.

And then, just as the experiment was about to get underway, a hacker exploited a flaw in the code to make off with roughly a third of the kitty. What happened next is a kind of parable for the future of value in the age of algorithms.

The creators of the DAO were understandably upset, and the group’s first impulse was to try and hit the “undo” button. Since Ethereum is a digital currency (like Bitcoin), surely there was some way to just reverse the transaction, like a credit card company compensating you when someone steals your account number and goes on a spending spree? To understand why this wasn’t going to happen, you need to know a little bit about how these digital “cryptocurrencies” work.

The premise of cryptocurrencies is that they don’t require a central banking system or government guarantees or large piles of gold in order to function as a unit of exchange. Instead, they depend on a public ledger system, usually one that works as a “blockchain.” A few times an hour, everyone who has a new currency transaction to report sends out an announcement on the network of fellow traders. The new announcements all get bundled up into a “block” and everyone competes to see who can authenticate it the fastest. Big groups of traders band together to authenticate the new transactions, and once a new block is authenticated it is attached permanently to the growing chain of blocks stretching all the way back to the launch of the currency. The whole purpose of the blockchain is to provide a transparent, write-once history of every unit of currency—a public ledger that anyone can use to make sure that their money isn’t being stolen or double-spent. All without having to contend with a central financial or governmental authority. Because nobody controls the blockchain, it is effectively impossible to rewrite without compromising the integrity of the software itself.

After much debate, the Ethereum community “fixed” the problem the only way they could—by forking the entire software platform, creating a new Ethereum where the transaction in question never took place, and an “Ethereum Classic” for ideological purists, curmudgeons and people who never bothered to update their software. Ethereum went from being the world’s second largest cryptocurrency in terms of capitalization to being the second and the seventh (including Ethereum Classic). The hacker has quietly been moving his currency, though it’s worth only 10% of its original value now that he’s stuck with Ethereum Classic booty.

This was the nuclear option of “undo” manoeuvres: a giant pain for everyone involved that also threw the community into a moral crisis. Those calling for the fork were effectively claiming the authority to rewrite the history of what was supposed to be a radically decentralized and democratic idea. What’s more, many of the people voting for this decision also stood to benefit financially, because they would get back the money they had individually invested in the DAO before the hack.

This may all seem nerdy and remote, but cryptocurrencies are coming to a market near you. Financial groups are creating public investment funds tied to the fluctuations of software-based currencies like BitCoin and Ethereum, and a growing number of retailers accept them as forms of payment. This is a significant sign of mainstreaming for an idea that explicitly rejects the kind centralized economic exchange that Wall Street and the Square Mile are built on.

And yet, if Ethereum could simply code the hack out of its own history, it’s not really money, is it? Ethereum’s very bad year is a story about how money is turning into code, and what that might mean. When most people talk about this they mean “money transmitted, counted, and spent via software.” But what Ethereum, Bitcoin and other experimental currencies want to prove is that money can become code, defined no longer by its financial value but by a kind of computational value. The deepest level of validation for BitCoin and Ethereum transactions is not volume or exchange rates but the processor cycles required to compute the next bit of the blockchain. Software underwrites the financial transaction: the blockchain itself puts a computational layer underneath the idea of exchange-value. Bitcoin, Ethereum and many other digital currencies are “programmable money.” This was the Ethereum community’s dilemma after the hack: ultimately did they see their platform as a new kind of money or a new kind of code? They chose software.

This matters because the more we value things according to processor cycles instead of exchange value (or the price something can be sold for), the more we are committing to a future dictated by the logic of machines. As we come to depend on algorithms not just to manage but to encode and define our units of information, the question of value is only going to get thornier. Email archives, health data, financial data…for computational systems, it’s all just data, and that poses a profound question about value. If what counts, and how we count, is measured in processor cycles instead of human exchange, it will change the rules of the economy as surely as driverless vehicles will change transportation. What we value is fundamentally a question of belief, and it’s increasingly unclear what we believe in more: billfolds or bits?