Pick a new 100$ bill in your hand and think how significant is it to you?
How many things you can buy with it now?
with a 100$ bill we can go to dinner with family in a good restaurant, can buy sexy shoes, can fill the car gas tank, can buy sexy clothes and many more things. With the 1 paper piece printed by the US govt.
Money?
what is the reason behind it the whole world deal with it?
where it's coming from?
what is the aim of this money?
Let's try to understand all the above queries.
At the beginning of the human age, they start to exchange services and goods, Something got from you and give back something in exchange, Give and take is the human's foundation of the economy.
When humans were livings in a tribe system, it's the basic social system that's why scientists call that era humans as 'social animals'
Compare a human infant with an elephant infant, elephant infants start walking instantly after born and have the ability to digest food like their parents.
Other side humans infants are very weak and need more care, That is why man learns to nurture his race in order to advance it.
Now, in those days, humans had to live in communities to survive, And the tribes came into being so that when a hunter is on the hunt, a community takes care of the children in their back.
This childcare exchange service was the first service of goods and service exchange. Some people traded food and shelter in exchange for raising children, The barter system became the backbone of the economy.
But this system has some issues, for example, If someone makes shoes and he needs some milk, In one shoe pair exchange should take 3 or 4-liter milk. but you can't drink too much milk in 1 time, that time they don't have a refrigerator to save the milk.
One more problem in the barter system was double coincident, Mean milkman needs shoe and shoemaker need milk at the same time, and also they are passing each other ways, this coincident rarely possible.
Historically, this issue has been settled among small tribes in the form of debt. That is, when the milkman gave milk to the cobbler, a debt was decided between them. The milkman will give the cobbler a few liters of milk from time to time and the cobbler will give the shoes at the same time.
It was easy to calculate these loans in small tribes where everyone knew each other. Loans were repaid on time and exchangers kept a record in their memory.
But this system will not suitable for larger settlements. Also not scaleable and difficult to accumulate and track savings.
At that time humans were fighting for their life. So they had no interest in these kinds of matters.
But as soon as humans understood agriculture and built large-scale settlements, they had to upgrade the system. They need an invention, The system Has the ability to allocate debt and savings over time, That did not rely on personal relationships. Only then could humans take this system of transactions on a big scale.
Humans began producing more food than necessary for the first time in history. And with all these grains in the warehouse, the concept of saving became even more important. Meaning how can we calculate debts where we don't even know each other.
Professor Thomas Wyrich writes about the barter system, If a thousand things were being exchanged in a street, people could set the price in a thousand ways. In the barter system, the price of the item is placed on something else. So this means the price of a sandal is ten dates, or one kilogram of wheat, or two sacks of lentils, etc., etc. So what is the right price, people did not understand whether they are making a good deal or a loss?
So we needed a new way to avoid this headache, We need 1 unit of account, 1 number means money. And it needed to be defined.
Necessity is the mother of invention
Money (Definition)
Medium of exchange
Store of value
Unit of account
The definition of this money shows that we need it.
Some of the earliest forms of money its called proto-money, Initially, money was written in clay tablets, clay tablets define how many sacks of wheat will get. Before the invention of writing peoples use clay tokens as a promise for counting.
Mesopotamia is the first place where the crop surplus was at such a height that workers began to build cities free from their labor. Build buildings and Fine arts flourished And trade increased.
There were five types of tokens used. Three of which symbolized the value of goods.
grains
Human labor
cattle
Archaeologists found clay token which was used in 3300BC almost 5300 years ago, which has written price value of a goat and some has the price of honey etc. etc.
This is a picture of the oldest human labor payslip. Slip shows ancient workers were paid in beer.
Over time, people and societies began to agree on the use of precious and invaluable metals. Between 2500 to 3100BC in Mesopotamia, silver became the standard of price. Silver was used because of its privileged status in society.
Gold was also a popular metal for currency, at the time it was thought that gold was made of sun tears.
The form in which taxes and other tenders were accepted and received was considered the most reasonable currency. In fact, that's still the case and that's the biggest challenge for Crypto to get into the mainstream.
The use of precious metals in economic transactions led to a revolution. Because it could be cast in different and smaller sizes. And different money could be made from them. The only problem was that people could mix gold and silver with less precious metals.
The metal currency was portable, but it was very difficult to move in large quantities. Between the Napoleonic Wars, the British government used the family of Nathan Roots Child to raise money for its soldiers on the French front. Because they did not consider it safe to transport large quantities of gold. Roots Child's brothers were living in different countries when one brother was given money by the British government and he told his other brother in France and he paid the same price to the army by taking out his huge fee in the middle.
Therefore, there was no need for physical transfer of gold and the transaction was secure so it was difficult to carry gold with guards and all safety.
Ordinary people also face difficulties in daily buying and selling gold and silver coins. Used check their weight so that they would not be mixed. That is why there is a ridge around the coin. So that they could be protected from scratching because people used to make new coins from scraping coins. Precious metals are not used in today's coins, but the ridges on them that were needed in the old days are now just a design.
The paper note was the next step in the evolution of money
