Seashells to Bitcoin: The Evolution of Money

Money is on our minds all the time.

Whether it’s wondering “should I buy a grande, double shot, caramel macchiato with whipped cream?” or planning that trip to Hawaii, paying that student loan, or investing it in Tesla, money consumes a large portion of our mental energy and that’s a fact.

But do you ever stop to wonder:

“What is money? Where does it come from? And what is it worth?”

Yeah, me neither.

But now I’m on a journey of money discovery and I intend to bring you along with me. Shall we get started?

First of all, you'll be surprised to learn that money hasn’t always been in the form of paper as we know it. In fact, many ‘things’ have served the function of money throughout our existence:

“Gold and silver most notably, but also copper, seashells, large stones, salt, cattle, government paper, precious stones, and even alcohol and cigarettes in certain conditions.”
– Saifedean Ammous.

Let's take a deeper look at how money has evolved over time in what I’m calling “Seashells to Bitcoin: A Brief History of Money."

What is money?

Bartering

“I'll give you a stone axe if you help me kill a mammoth.” A bit extreme of an example I know, but it does the job.

In bartering, you need to find someone that agrees with you that a stone axe = killing a mammoth in value. It worked well for small groups of people thousands of years ago, but not so much in today’s highly populated, competitive and complex world. But bartering is still alive and well in small circle of friends - like when you say "Thanks for paying Uber, I'll buy you a drink next time!"

Coins and Currency

King Alyattes from Lydia minted the first official currency in 600 B.C.! The currency helped Lydia become one of the wealthiest empires of the time because it sped up trade. People weren't spending time bartering, they were now directly exchanging currencies and getting business done!

But sadly, Lydia's reign in currency development was shortlived because...

Paper

The Chinese took over when they moved from coins to paper money.

FYI: Europe was still using coins up to the 16th century. But eventually, banks started using bank notes and paper money became “representative money” - which means that while it has no inherent value, banks promise it can be exchanged for silver/gold (therefore creating value). Representative money is today replaced by “fiat money” like our Canadian Dollar #ahamoment

Mobile & Online Payments

This is basically what you do when you register to Netflix, add your credit card details and get charged monthly. We make payments online from the comfort of our homes, or mobile devices. We can send money 24/7 to anyone from anywhere. Online payments have disrupted all previous forms of currencies and are paving the way for the newest form of currency...

Digital Currency

Bitcoin (a digital currency) was released in 2009 by Satoshi Nakamoto - who to this day remains unknown!

While a currency, it’s unlike the Canadian Dollar for example, in that there are no physical coins for Bitcoin. Transactions and balances are kept on a ledger that verifies all Bitcoin transactions with a massive computing power. The success of Bitcoin has led to thousands of other cryptocurrencies being developed to this day. PS. If you don't know much about crypto, stay tuned for our next post!

So there you go! A super brief history of money which you can share with your loved ones at your next family event. And if you want to get ahead and start investing in crypto, then check us out at blog.netcoins.com

Until next time!

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Read more about it here:

The Bitcoin Standard
The History of Money
Economics: The History of Money

If you want to learn more about all things in crypto, read more here.