How did we get here?
“…In the Google era, Newton’s system of the world – one universe, one money, one God – is now in eclipse. His unitary foundation of irreversible physics and his irrefragable golden money have given way to infinite parallel universes and multiple paper moneys manipulated by fiat. Money, like the cosmos, has become relativistic and reversible at will…” – George Gilder “Life after Google”
To understand the value of crypto as a means of payment, it is necessary to plunge into the history of money.
Money is a universal medium of exchange.
Humanity has come a long way, from the direct exchange of fruits for mammoth meat, the use of a bag of rice to measure the value of fish/meat, to the universal precious metal that measured the value of movable and immovable property for many centuries.
As society became more complex, the need for a faster exchange of wealth matured. This is where various “bank receipts” come from. The bank began acting as a guarantor that Mr.A owed a certain amount to Mr.B and had enough gold/silver to pay off this debt. To simplify all this, paper (fiat) money was introduced. The bank acted as a guarantor – one banknote is backed by a certain amount of gold or silver.
With the advent of transatlantic trade, there was a need for large amounts of cash, which created new inconveniences and a new challenge. Hence the appearance of IOUs. In order not to wait for new shipments of cash from across the ocean and not to return to primitive barter, IOUs were used, the obligations for compliance with which were assumed by the local administrations of the colonies.
The rivalry between jurisdictions (monarchies) often escalated into money wars. Holland, France, Great Britain notably frolic in their time. But the winners were another country. Spoiler – USA 🇺🇸
The introduction of mobile payments has relieved us of the need to carry cash around with us. Paypal, Applepay and others allow you to transfer different amounts of wealth to (virtually) anywhere in the world by pressing keys on your smartphone.
But, the world is changing, technologies are changing and the use of the American dollar and other fiat money doesn’t satisfy everyone.
Humanity has “outgrown” the previous system, and we are witnessing the creation of a new system for the transfer of wealth within humanity.
To be continued…
Spoiler: its Bitcoin and Crypto.
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Risk Warning: The information in this article is presented for general information and shall be treated as a marketing communication only. This analysis is not a recommendation to sell or buy any instrument. Investing in financial instruments involves a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both an increase and a decrease in capital.