Bite-size Bitcoin Learning

Photo credit

The origins of modern-day money trace back to the use of IOUs in small tribes of humans starting tens of thousands of years ago. The problem of direct exchange (sometimes called barter) was solved by individuals keeping track of who they owed an “IOU” to, as well as who owed them “IOUs.”

This practice is still common today – how many of your current friends do you owe favors to? Or them to you? Do you keep track? Do you call in favors when you need to?

Sometimes the transaction size was large, or a person might be exchanging with someone they may not see again. In these cases, a more robust solution was sought. People could use items like salt, wheat, to***co, animal furs for warmth, etc that were valued for consumption. Additionally, these items were valued by all tribe members for consumption. You could trade them later in exchange for something you need at that time; they were a medium of exchange.

Coinage came to be at the start of the Bronze Age ~5,000 years ago and represented an easier way to track IOUs and a better option (more durability, no shelf life, no rot, corrosion, etc) for a medium of exchange.

Money is just a tool to make everyday exchange as convenient as possible. See more at bitcoinfirstdraft.com/what-is-money