Welcome to this journey into the origin, history, and evolution of money and the ongoing transition to cryptocurrency. From Barter to Bitcoin –the unfolding future of money and why it should matter to you.
He who sacrifices freedom for security deserves neither ~Ben Franklin
This post is made for you if this is the first time you hear about bitcoin, never understand a thing someone told you about it or you simply don’t buy the idea yet.
Even if all you do with this post is to watch this interesting and insightful video detailing the story of money as we know it –it will be sufficient. By all means, watch it to the end.
How Did We Get Here?
The Origin and Evolution of Money
He lived on fruits, crops production, and hunting of animals. Through subsistence farming, he could produce everything he needed to survive.
Enters the Barter System: What is Barter?
Barter is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money ~Wikipedia.
The Barter System was first introduced by the Mesopotamia tribes and dates back to 6000 BC.
The system was later adopted by the Phoenicians who were actively engaged in “Trade by Barter” with various other cities across the oceans.
The Babylonians also developed an improved bartering system where goods were exchanged for food, tea, weapons, and spices.
At times, human skulls were used as well as a means of exchange for other goods and services.
Salt was another popular item exchanged for goods and services and was so valuable that the Roman soldiers’ salaries were paid with it.
More so, in the Middle Ages (476 AD – 1453); Europeans traveled around the globe to barter crafts and furs, for silks and perfumes.
And colonial Americans exchanged musket balls, deer skins, and wheat for goods and services.
Money Was Birthed
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context ~Wikipedia
The concept of money has been part of human history for almost 3000 years now. And before the advent of money, as noted above, the bartering system was in use.
NOTE: When money was invented, the bartering system did not end, it became more organized even until today, and people are still involved in bartering goods and services.
So BITCOIN didn’t come to end or REPLACE fiat, gold, banks or subvert government’s authority as some over-enthusiastic bitcoin and cryptocurrency proponents would like to portray it.
We are not “fighting” the current system. A transition is happening that you should pay close attention to.
The Evolution of Money
This is how money has evolved over the years.
In 600BC King Alyattes of Lydia (now part of Turkey) created the first known currency; with the first coins ever minted featuring a roaring lion.
It all started with coins –but not Bitcoins
The coins were made from electrum –a mixture of silver and gold that occurs naturally, and stamped with pictures that acted as denominations.
With the development of its currency, Lydia was able to better facilitate and increase both its internal and external trades, making it one of the richest empires in Asia Minor (Anatolia).
It is interesting that when someone says, “as rich as Croesus“, they are referring to the last Lydian king who minted the first gold coin.
Unfortunately, minting the first coins and developing a strong trading economy couldn’t protect Lydia from the swords of the Persian army (sad, but we’re talking money right? not war or nation history).
Then Came Paper Money
Just when it looked like Lydia was taking the lead in currency developments, around 700 B.C., the Chinese moved from coins to paper money.
By the time Marco Polo visited in 1271 A.D., the emperor had a good handle on both money supply and various denominations.
In the place of where the American bills say, “In God We Trust,” the Chinese inscription warned, “All counterfeiters will be decapitated.”
Europeans were still using coins all the way up to the 16th century, helped along by acquisitions of precious metals from colonies to keep minting more and more cash. (Money printer go brrrrrrr didn’t start today).
Eventually, the banks started using banknotes or IOUs for depositors and borrowers to carry around instead of coins.
These notes could be taken to the bank at any time and exchanged for their face values in silver or gold coins.
This paper money could be used to buy goods, and it operated much like the currency of today.
But it was issued by banks and private institutions, not the government, which is now responsible for issuing currency in most countries. (So private institutions issued money? Bitcoin isn’t the first non-government issued money? – interesting).
Expanded Foreign Exchange
The shift to paper money in Europe increased the amount of international trade that could occur.
Banks and the ruling classes started buying currencies from other nations and created the first currency market popularly known as Forex Trading.
The stability of a particular monarchy or government affected the value of the country’s currency and the ability for that country to trade favorably on an increasingly competitive international market.
The competition between countries often leads to currency wars –where competing countries would try to devalue their own currencies in an attempt to stimulate growth in their economies.
Local exported goods become more competitive against foreign important goods –which benefits the country who’s currency is devalued.
It is important to note that the development of the Forex market provides an opportunity for traders, investors, banks, and practically anyone with the internet to speculate on the movement in the price of national currencies –similar to what cryptocurrency traders do.
Buying a currency when the price comes down and selling it when the price goes up.
Enters Mobile and Electronic Money
E-money, digital money, electronic payment, mobile money, and whatever name it goes by naturally became the next stage in the development of money. As man constantly searches for the most convenient, faster, and cheaper means of exchange.
The 21st century gave rise to two disruptive forms of currency: Mobile payments and virtual currency.
Mobile payments are money transfers or payments for a product or service through a portable electronic device such as a cell phone, smartphone, or tablet.
Mobile payment technology can also be used to send money to friends or family members.
Increasingly, services like Apple Pay, AliPay, Samsung Pay, Square, and a bunch of others are vying for retailers to accept their platforms for point-of-sale payments.
Electronic money is money sitting on computers. Figures and numbers representing value and that’s what the rich spend the most.
The biggest deals and payments are never made with cash or fiat. They’re made with numbers and figures on computers and mobile apps.
These monies are supposedly exchangeable for physical cash equivalents –we may be surprised that’s not the case if all humans should go requesting for the cash equivalent of what they have in their bank accounts (just an amusing thought).
NOTE: The major factor in all of the development from barter to the current monetary system has been “convenience”. Every new system of money is more convenient than the previous as the man seeks better ways to exchange, transfer, and store value.
And this continued search for a more convenient and better means of exchange will go on for as long as man exists.
So Came Bitcoin (Cryptocurrency): The Cash of the Cash
Bitcoin was invented in 2009 by the pseudonymous Satoshi Nakamoto and now transforming to become the gold standard –so to speak –for cryptocurrencies.
Cryptocurrencies have no physical coinage. The major appeals of cryptocurrency are that it offers:
- Lower transaction fees
- Increased privacy
- Increased financial autonomy
- Faster transactions speed
- Easier international trades (as payments across borders are instant and cheap)
- Higher security
- Greater adaptability and flexibility than traditional online payment mechanisms
And is operated through a decentralized system with no central controlling authority to dictate how, when, and what you spend your money on.
What is Cryptocurrency: The Future of Money?
“A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems”. ~Wikipedia
Bitcoin is the first cryptocurrency to be created and it enjoys that first-mover advantage as it is the major and most valued and community-supported cryptocurrency in the market.
According to the founder, Satoshi Nakamoto Bitcoin is peer-to-peer electronic cash that allows online payments to be sent directly from one person to another without going through a financial institution such as banks.
Primarily Bitcoin was created as a response to the failures of the current financial system and to break the masses from the control and manipulation of a few powerful elites that maintain a tight-hold of money and the monetary system.
More so the current financial system is inefficient for the modern-day need of man.
For example, there’s a limit to the minimum amount you can send from say –between the US and China –thus small transactions are not supported; coupled with the high cost of making the payments which is escalated by the need for the banks and other intermediaries to make a profit off every transaction.
With cryptocurrency, billions of dollars worth of value can be moved at a cost less than 1 dollar and will be delivered to the receiving party in less than a minute.
What’s more, there’s nobody to question where and how the hell you move your own money.
No freezing of account due to “excess” transaction or any kind of bullshit banks tell you regarding your own money.
- Bitcoin transactions cannot be reversed
- You can send any amount –even $0.50 at a cost as low as $0.005 or less. Some cryptocurrency transactions are even free.
- No intermediary or third-party needed.
- Payments are settled instantly regardless of the distance between parties.
Bitcoin was created to put the financial system in the hands of the people.
For the first time in history, you’re empowered to have control over your finances and privacy.
Summary of the Future of Money
As can be easily taken from the above progression; money has never remained stagnant in any particular form.
From Barter system to the use of cowries, salt and other special items as means of payment; then coins; banknotes (IOU); paper money (fiat); plastic money (credit cards), mobile money, electronic or digital money and now cryptocurrency and I strongly believe it will be “spiritual money” in the next millennium –there’s never gonna be an end to this constant search for a more effective and efficient monetary and financial system.
So why are governments “fighting” it?
Wrong question! No government is fighting Bitcoin or cryptocurrency. Governments are fighting to retain and continue to exert their powers and influence over the masses which bitcoin and cryptocurrency seem to be capable of weakening.
The government maintains tight control and powers over your finances, and they’re not willing to lose that to cryptocurrency which puts that power right in the palm of your hands.
The “fight” and resistance from governments you see are not against the technology per se but a fight for supremacy, control, power, and hegemony –you need to really get that.
Why Should You Care About This Transition?
Should it Matter to You What Becomes the Cash of the Future?
You don’t really have to care that much –except your future is important to you.
However, it’s a privilege that this is happening at our time and it’s good you know that this is actually happening, right now and very fast.
And no matter where you choose to stand or what you want to believe in all of this debate; one thing is certain –you can’t escape from, prevent or even slow this process of transition.
It will happen and you’ll have to embrace it –it’s only a matter of time before this fully materializes into a globally, massively adopted the technology.
It’s, therefore, a wise idea to position yourself early enough. Don’t just sit and wait for this system to “happen on (to) you” –as it will to many people.
By then there might be little to no significant advantages to you as the “powers that be” don’t really want you to have all that financial freedom, privacy, and prosperity that cryptocurrency offers.
If financial freedom, privacy, prosperity, and greater convenience are nothing that matters to you, then I apologize for wasting your time; just pretend nothing is happening.
Then wait, watch, and see.
Need to buy your first cryptocurrency or a fast, secure, and anonymous place to trade — go here.