Listen to this Article in Audio format
Money! The thing we use the most to buy and sell items.Money helps us buy food, water, electricity, and so on. Without it, we can’t do anything! But where did the money come from? And how did it evolve to be the money we know and work for in our day and age?
Part 1 – Barter
Before money ever existed, people bartered for goods and services. They would exchange things they had a lot of for something they needed. For example, Two farmers would exchange cow milk for wheat.
Part 2 – The Rai Stone
In ancient times, people on YAP Island used a “Rai Stone” as a currency. This was a huge stone (up to 12 feet in diameter with a hole in the middle). People used it because it was scarce, and they couldn’t carry it around due to its enormous size. So, it took a lot of work to inflate the supply.
Part 3 – Gold
Gold has always stored a considerable value, and this value continues until the present day. People used Gold as a currency because it was difficult to mine and had a limited supply.
Important to mention: No one knows the actual volume of the Gold’s supply, and once new Gold is found, the supply grows.
Part 4 – Gold Backed Money
After Gold came a new type of currency: paper money. As we all know, the paper holds small to no value, so to give this new currency some value, people backed it up with Gold. With the help of Banks, people began carrying this new currency in their pockets, and exchanging it for goods and services was easier. If a government wanted to add the currency supply, it had to buy more Gold to back it up.
Part 5 – Fiat
With time, Fiat (you can see its meaning here) came along. It is still paper money but not backed up with anything, so the supply is open. The government of that same currency can add and print money as often as it wants.
Part 6 – Digital
With technology rising, we have computers and the internet in every home. So, banks (where we put our Fiat) introduced us to Bank cards and mobile apps to pay everywhere without needing paper money.
Part 7 – Bitcoin
In 2008, after an international economic crisis, Bitcoin was born with the help of “Satoshi Nakamoto” who created this currency to help people in this crisis. Bitcoin is a decentralized digital currency with a limited supply of 21 million coins. Bitcoin works without a trusted third party so it can operate outside the bank and Fiat system.
In the end, this is a small brief of the history and evolution of money. Please comment below this article if you have any questions or want to talk more.
This is a guest post by Cryptonatorguy. Follow him on Twitter @cryptonator_1. Opinions expressed are entirely their own and do not necessarily reflect those of Satoshi’s Journal or Satoshi’s Entertainment Company.
Thank you for this clear explainer, Cryptonator!
Gold leads to paper gold to fiat to digital. Shows clearly how #Bitcoin is better than “Digital Gold” because it’s supply cap is fixed at 21 million!
Oh yes, of course, Bitcoin is always the way my friend.
Thank you for this lovely comment <3