From Hundi to Blockchain: Tracing the History of Distributed Ledgers
The distributed ledger is one of the foundational pillars of blockchain technology.
But did you know that the concept behind the distributed ledger is not new and has its roots in ancient history?
The Rai stone of the Yap
The idea of a distributed ledger can be traced back to the fascinating ancient monetary system of the Yap people, who inhabited the Pacific Islands. Their currency was in the form of ‘Rai’ stones, which were incredibly large, measuring around 8 feet in height. Whenever a transaction took place, the stones on the beach were redistributed to their rightful owner.
However, what’s worth noting here is how they recorded these transactions. The Yap elders would gather at the site of the Rai stone, and in their presence, the transaction and transfer of ownership would be announced, allowing each elder to memorize it. Essentially, every individual’s brain acted as a ledger, and since everyone had this memory, the ledger was distributed.
As the population grew, and the size of the Rai stones made them impractical, the Yap people likely discontinued the use of this unique currency system. With the passage of time, various forms of currency emerged, but the method of recording transactions gradually became more centralized, with transactions being written on paper or books, typically controlled by a central authority.
But the interest in a decentralized ledger was far from over.
The Rialto System of Venice
During the 11th century, in the Venetian Republic, a clustered archipelago of small mud islands, the distributed ledger found another innovative use case in the form of the ‘Rialto’ system.
This decentralized accounting system allowed traders to keep track of their transactions in a shared ledger maintained by multiple parties.
The Rialto system was instrumental in facilitating trade and commerce during that era by providing transparency and security, which were crucial for maintaining trust between the parties involved in the transactions.
There have been other instances of the use of distributed ledger to provided transparency, security, and accountability, much like the modern-day blockchain technology.
The Clay tablets of Mesopatamia and the Tally sticks of England
In ancient Mesopotamia too there were people used clay tablets to record transactions. These clay tablets were then stored in multiple locations to ensure redundancy and prevent any single point of failure.
In medieval England there were attempts at using tally sticks where notched wooden sticks were used to record transactions. One part of the stick was kept by the seller, and the other part was kept by the buyer, with the notches representing the amount of the transaction.
The ‘Hundi’ system of India
A hundi is essentially a written order to pay someone a specified sum of money on a future date. The fact that these orders are frequently transmitted from person to person, with each intermediary adding their own verification to the hundi, distinguishes this system.
This implies that the hundi system functions as a distributed ledger, with each member of the chain functioning as a network node. The payments are made through a network of middlemen, each of whom adds their own stamp of approval to the hundi.
In conclusion, the idea of using distributed ledgers to record transactions has been present throughout history, with various forms of decentralized accounting systems being used in different parts of the world.
The Rai stones of the Yap people, Rialto system in Venice, the tally sticks in medieval England, and the Hundi system in India are just a few examples of how decentralized ledgers have been used in the past.
Today, with the rise of blockchain technology, we have the opportunity to take this concept to new heights. By harnessing the power of distributed ledgers, we can create secure, transparent, and immutable systems that have the potential to revolutionize the way we conduct business and interact with each other.
As we continue to explore the potential of blockchain technology, let us not forget the rich history that has led us to this point.
