By : Abali Ikulu
To better understanding the ongoing evolution of digital currency it's essential to understand the origin and purpose of the traditional money we have always know . What can be the definition of money ?
Money is the means of payment used to carry out purchase or sale transactions ,usually it's in the form of a material object made out of metal or paper that is given a conventionally recognized value.. Before money the economy in it's primordial form was bartering and the end of self sufficiency.
Since the dawn of mankind in fact people have exchanged food ,leather,utensils ,jewelry and everything that could be used for living . Each family unit produced what is needed and exchanged what is lacked.This system quickly proved ineffective because what a family had to offer might not serve the community or local merchants conversely ,want communities and merchants offered may have been useless to a family .for example : a wool cloth merchant barters with an egg farmer, This hypothetical exchange could happen without problem in February but the merchant would have serious problem bartering his goods in the summer in this simple principle is backdated to a few thousand years ago . It is easy to imagine how as trade progressed and crafts specialized the oldest human societies felt the need to replace bartering with more articulated forms of the exchange ,at this point objects no longer passed from one person to another for their value of use ( I give you an apple for a egg to eat what cannot produce myself ) but for their value of exchange ( a sheep or a cow can produce milk and tomorrow they can be resold or slaughtered )
The money before becoming what we know today was many things : Cattle,salt, feather, or shells. The idea of transforming precious metal into small circular Discs arrived only 200 years later it's spread in the Hellenic world and in the south of the Italy .All in all only 2400 years have passed since many came to exist as we know it today. The first from of banknotes were born in China about 2500 years ago they were paper deposit receipt used as a method of payment .
The diffusion of banknotes coincided with the birth of banks in Europe around 18th century until the 20th century most national currencies remained linked to the value of Gold called : Gold standard every central bank therefore have a reserve of Gold which gave the right to a certain amount of credit in the form of banknotes or deposits. The principle of the Gold standard provides a fix exchange rate between different currencies thus increasing stability . from 1971 with the end of the Breton wood agreements the currency that relied largely on its intrinsic value mostly Gold and silver was declared in convertible and began to be coined virtually ,from that moment on all coins became fiduciary i,e without an intrinsic value. What a race !