From the past to the future: the twisting story of money
How It All Started
Although the history of money lacks certain dramatic features intrinsic to the history of nations or war, some people find it truly fascinating to study the twisting transformations of our financial embodiments.
One can hardly imagine today’s life without money. Money defines all our life choices; it underlies our goals and dreams, it gives power and establishes the price for almost everything in this world. Even morality can fade where lots of money is involved.
The need for money arose when people first realized the concept of trade. It happened long ago, at the dawn of human civilization, when one man had too many cows and his neighbor had lots of grain but no cattle. Already in 9000 BC, people would barter furs, cattle, grain, salt, housewares — practically everything they had in abundance in exchange for things they lacked. Direct product exchange might seem reasonable at first, but there is always an issue of adequate product assessment and availability. It’s difficult to trade different items on equally beneficial terms, and thus one party is usually at a disadvantage. Besides, it’s an additional challenge to find someone who needs your goods and offers what you need at the same time.
In 1100 BC in the empires of Babylon, India, Egypt, and China, the parents of money in the conventional meaning appeared. They were small replicas of goods they represented made in clay or bronze. Most temples and palaces had special storehouses that assigned these small copies a certain quantity of real goods and traded them for either services or commodities.
Although the first manufactured coins were made between 700 and 500 BC in China, India, and areas around the Aegean Sea, the ancestors of our modern coins are considered to be the coins produced under King Alyattes in Lydia, in 600 BC. The emergence of coins facilitated trade operations within empires and significantly boosted commerce. Later, in 1250 AD, the introduction of Florin coin, widely adopted across Europe, promoted international trading operations and laid the foundation for cross border business.
Paper money was first put into circulation in China in the 11th century during the Song Dynasty but reached Europe only in the 13th century with the travelers Marco Polo and William of Rubruck. Still, the adoption of this new form started after 1661, when the first European banknotes were printed by the Bank of Stockholm. Paper money has been used ever since. However, long before banknotes were globally distributed, the predecessors of moderns bills had been used. Those were bills of exchange, so-called Tallies, introduced by the English rulers in the 12th century.
Advancements of Recent Ages
In the 1860s, Western Union started a new page in the history of money by creating e-telegrams, the money transfer service enabled through the telegraph network. Almost a hundred years later, in 1946, the New York banker John Biggins introduced the first credit card, allowing for instant purchases with delayed payments. Although that credit card had numerous limitations and could only be used for small local purchases, the ground was laid. Some 53 years later, mobile banking was introduced. The earliest services for primitive mobile phones operated via SMS banking were followed by the shift towards mobile web applications in the era of smartphones supporting WAP connect. SMS and web banking were two major mobile payment options before 2010 when the expansion of mobile banking applications began. Apple’s success brought about a wave of smart banking solutions, like ApplePay, enabling payment with a phone instead of a credit card. In fact, in 2012, about 20%-58% of the total global percentage of transactions were electronic with the use of digital money. (The wide range is caused by the differences in various countries’ percentages.)
Although money’s form and shape has developed over centuries, sometimes it seems like humanity has fallen into trap by empowering others too much and giving up the controlling power to banks. They have the power to set high service fees, raise transaction fees, and set ridiculous interest rates; they can freeze bank accounts guided by their own policy with no actual accountability to people. At the same time, banks are highly centralized, and thus the actual power over the majority of humankind is concentrated in the hands of a few. The reality of today is inflation, and poverty rises as we speak. So maybe it’s time to stop updating the form of money and concentrate on the fundamental problem of a management system.
The Hope of Tomorrow
Whilst there were some cryptocurrency attempts back in 1980s-90s, the emergence of blockchain is historically associated with Bitcoin. Since its development in 2008, numerous blockchain projects have popped up, and today we have probably witnessed the peak of its growth with the technology being used in practically every industry.
The blockchain boasts many advantages compared to standard banking systems. It’s decentralized, transparent and secure with no legal restrictions or biased privileges. Although Bitcoin was initially developed as an alternative currency, there are many successful examples of retail and healthcare blockchain projects. The technology works, so why not use it for its original purpose and bring some changes to modern economies.
Considering strictly financial projects, UNISON is a good example of the power blockchain delegates to people. The project’s mission is to set the balance of finance and reestablish the authority of individuals over their own economies. The system is created by professionals in a field understanding that poverty and inflation and the vicious circle of high interest rates can only be broken with a unique and unlimited solution, free from traditional restrictions.
The history of money might be tangled and flawed at points, yet it demonstrates the ability of the human mind to adapt and evolve. Even though we live in the era of smart technologies and robotics, certain relics of the past continue to invisibly haunt us through the years; centralized banking and the lack of long-term currency sustainability are examples of those relics. Today, we have a chance to start building our future with smart technologies and flexible, democratic systems, the choice our ancestors in ancient empires never had.