Money

I will begin with a brief economic history. Modern civilization’s foundation is agriculture. This innovation allowed for the accumulation of wealth through the barter system. Real, intrinsic goods were traded. Fish for salt. Barley for cattle. Eventually sovereign governments and religious temples were formed to regulate society. But it was a logistical problem to collect taxes and offerings via agricultural products. So, around 2700 years ago coins were circulated. This innovation allowed for a uniform storage of value that was easier to transport than goats or wheat. This was the first paradigm shift in wealth storage and it lasted a long time. A thousand years later the Chinese were the first to introduce paper money. Gold, silver, and other metal coins became too impractical for daily use. Remember, the goal of monetary systems is to allow for the convenient storage of value. Paper is easier to transport than metal. Metals still had a place in the system though. The paper money usually was backed by something stored in sovereign government, or private banks, vaults. In 1971 the convertibility of US dollars into gold ended and a digital money backed by confidence became the international currency for wealth storage. Many other events occurred in the last century alone, but I am trying to be brief. The above primer is a necessary read for the uninitiated. Money is a storage of value.