MONEY …. SOME HISTORY
I am in the process of writing my first book which of course will be on Bitcoins – LOL – and am doing a lot of research and gathering facts and figures. But one of the parts that I am finding extremely interesting is the history of money. What is it and how did it evolve. The average person in the street, myself being amongst those, don’t understand the true nature of money.
So I thought I would write a very short blog today on a little tit-bit on what it’s about.
In the ages gone by when people from different tribes and areas wanted to trade with each other, they needed to find a means of exchange that had a value that each and everyone could agree on. It needed to be available in various sizes as such, in other words, scalable.
This then brought in what we understand today as “commodity money”.
So what was used in those ancient days? Well the Aztec used cocoa beans, Fiji used whale teeth (yip they have teeth) Tibet … wait for it …. Yak dung. Of course we remember from history lessons in school how important salt was for the Romans. Obviously there are many more examples but remember, I want to keep this post short :O)
Each one of these commodity monies needed to embody 5 characteristics in order for them to be classed as commodity money, a real means of exchange. So what were those characteristics?
- Needed to be relatively scarce – obviously if there was an abundance world wide of something you could just pick up that would be of no value.
- It needed to be easily recognisable.
- Whatever the commodity, it had to be able to be cut into smaller pieces.
- You needed to be able to substitute one piece for another of equal value.
- You needed to be able to carry it around with you without too much trouble.
So in the ancient times if it had the 5 characteristics of commodity money, probably someone used it as commodity money. Arrr …. even though I say ancient times, it actually still happens today – check out a primary school and you will see children exchange any manner of thing as a form of currency, baseball cards, Pokémon cards, sweets and the like. Andreas Antonopoulos said” the people invent currency when they have no other currency.”
Interesting fact – the first minted metal coins were around 2500 years ago in China and what is now Turkey. They shared the exact same 5 characteristics as the commodity money. They were far more durable than say a crop of cocoa beans right. Amazingly, sometimes the only thing left of an entire civilization is it’s minted coins.
Anyway that’s enough about early money. As you know I am totally in love with Bitcoin – that programmable, digital, crypto currency. It obviously has all 5 of the characteristics and has a real scarcity as there will only ever be 21,000,000.
Hoped you enjoyed this little history blog post. Life revolves around money, for basic things like food, shelter and clothing. Let’s get back to a form of exchange that holds its value and will not be debased as the majority of the Fiat currencies are today. Bitcoin covers that …. have you got yours yet???
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