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The History of Money & the Future of Bitcoin and the Cryptocurrency Economy
This article examines the historical and current use of money and how Bitcoin or other cryptocurrencies can fit into the future of money.
Money was created many times in many places. Its development required no technological breakthroughs — it was purely mental revolution. It involved the creation of a new inter-subjective reality that exists solely in people’s shared imagine.
Money is not coin and banknotes. Money is anything that people are willing to use in order to represent systematically the value of other things for the purpose of exchanging goods and services.
Sapiens (2011) by Yuval Noah Harari
Bitcoin’s value proposition is not digital currency — 90% of existing money only exists as digital currency; Bitcoin’s value proposition is its methodology in guaranteeing the trustworthiness of digital currency.
Act 1: The History of Money
Supposedly, it began with hunting and gathering, which dominates over 90% of modern human history. During that epoch, anthropologists considered humans a jack-of-all-trades, learning all necessary skills for survival. Arguably, the image of the earliest supposed form of trading comes to mind: a caveman trying to initiate a trade by giving away his rabbit fur in exchange for what he wants, some boar meat. Today, that exchange practice is called the barter system, and it is well-accepted as the earliest form of transaction.
I say well-accepted because anthropologist David Graeber argues that the earliest supposed predecessor of money, bartering, didn’t exist before money. Even if the barter system did exist, it wouldn’t have been practical as a sustainable daily practice like the exchange of money. Imagine how hard it would be if no one wanted anything you had to offer — you wouldn’t last very long. Or if your only bartering item was a dead mammoth — what would you do? Drag it around with you to trade for berries?
