In order to understand why bitcoin is crucial in our societies, let’s go back in time and understand the mechanics of money.
Here are the important historical events that existed long before we truly understand the secret of our monetary system, the banks, and important figures that crafted currency and trading in our society, by which we believe and trust that everything around us happens for the common good.
We will break it down in to 3 chapters to expose to you how money works….
Chaper 1.
In those ancient times people generally exchange value whenever meeting another individual through the use of objects as a form of early monetary expression. These practices were treated as normal. The first kind of systematic process of giving and sharing commodities as humans. Tally was a method used by the Sumerian people to record daily transactions as population grew in multitudes. Throughout the years of giving and sharing, everyone felt responsible to create craft that can be shared to one another. Sharing objects became a demand more than a privilege. Leaders began to impose taxes due to the growing population as necessary for massive accounting. They stored more valuable objects like cowry shells and became re-tradable tokens. This give some rulers earn respect from the people, they stored objects in the center capital of the community.
Indigenous People
There came a time when people trade their goods but lack matchable items equivalent to the value desired of another by which had made some objects less valuable than the other. Most objects they use were easy to produce and is not scarce. A third item was necessary useful as intermediary to this arising conflict between exchangeable objects. They eventually called it “money”. Any object that will is highly regarded by everyone, an intermediary in cases where the interest of the other party is not agreeable to the other.
Early types of money
Some remarkable areas in the world use objects that were significant to remember. One of the honorable mentions was in the year 1027-256 BCE China used a metal knife as a kind of money.
Metal Knife Currency
China created the first invention of the coinage system. Rulers forge metal coins stamped with faces of important figures, that are durable, portable, divisible and legitimized by the authorities and is considered with intrinsic value. They created coins with holes run through strings. The amount of coins depends on the length by which was equivalent to the amount of value given per string.
Chinese Strings of Cash
Then, people learned trading with the use of metal money. Another one is the Island of Yap who uses Gigantic limestones as their money.
Gigantic Limestones
Another early form of money is the use of cowry shells from the indigenous people of East Coast North America which was nearly comparable to gold. It is durable, impossible to counterfeit and not easy to acquire like silver and metal.
Cowry Shells
As the economy evolves in trading, long distance travel would cost piles of coins which were too heavy to carry. It exhausted people to drag tons after tons of metal money.