The history of money – why do we need cryptocurrencies part II

 

In the previous episode, we left you in ancient Egypt, where the pharaohs set world standards for showing off their business successes. Let us remind you that at this stage, humanity did not invent coins, but it was already paying with precious metals. The first time for that was approaching closely.

Did the Chinese invent donuts?

Although serious historians will never tell you this, the inhabitants of ancient China probably unofficially wanted to compete with the Sumerians for the number of patent applications filed. Contemporary builders owe you the middle of a wheelbarrow, travelers compass, military powder, British tea, and probably all paper. This last invention will come back in this story.
The economic power, as we have already determined, is built, among others through international trade. China exported silk and precious metal and bronze products. This process was the reason for the spread of money (not in the form we know today, but as a payment method as such), but also the change in their form. There are coins next to bars of gold. Chinese coins looked similar to those known to us, but they had a characteristic hole in the middle. Does this shape inspire the creators of donuts and thanks to the Chinese people can we enjoy this delicious sweets today? We do not know that. This is another question that is not asked by serious historians …
But what would the world be without banknotes. Do you remember that we promised to mention about paper? Around 120 BC. there is money made of parchment. However, it will take a long time for it to dominate the economy.

Coins in the world of Greeks

The ancient Greeks are another nation whose idea of ​​cryptocurrencies could be liked. Why do we think so? It is enough to look at their form of political organization. They did not create a large, centralized empire, but independent city-states (polis). In addition, the inhabitants of each city differed a lot from each other. The Athenians enrolled in our consciousness as intellectuals (going to the school class metaphor, probably they would be those who sit in the first bench and like to discuss with the teacher about serious matters). The Spartans belonged to this group of people who first beat, then think (in our school they would be, so those from the rear benches, constantly interfering in the conduct of the lesson). From the iconic scene from the movie “300”, presenting the conversation of their king Leonidas with the Persian deputy, we can also conclude that they did not follow the principles of savoir-vivre.

Looking at it from the side, the Greeks were, however, a kind of big family that does not always agree with each other, but nevertheless respects each other.Above all, citizens of city-states gladly traded. Importantly, their economy was based in large part on colonization and overseas trade (but also on slaves, which they did not even despise – here’s a news – “libertarian” Athens). It may remind you a little of the period of European development in the times of the conquest of both Americas, Africa and Asia.

Again, to improve trade, a new form of money appears. It is recognized that the first coin was minted in Lydia, a land located in Asia Minor. This took place in the 7th century BC. The coins were made of an alloy of gold and silver – an electrum (a material with the same name as the cryptocurrency portfolio popular today). Once again, the idea of ​​convenience and practicality decided about popularizing the idea. The invention was quickly adopted in the Greek world (city-states and colonies). A copy of this model is created – Egyptian coins, which became a payment standard in the Peloponnese for 200 years. In international trade, staters (heavy coins), eubian and Milanese mines (maybe we compare them to Bitcoin) were used. For micropayments drachmas and obols (Litecoin and Ethereum?) were enough.
Apart from trading, Greek coins could also be used to pay for mercenaries who played an important role in the economy of polis. The popularization of the invention led to the fact that as early as the 5th century BC in the area of ​​various city-states, one hundred towers operated (this can be compared to the development of mining and the increase in the number of BTC mines). Age is enough (remember that changes did not happen as soon as today), that the idea of ​​coins would crept into the world of Phoenicians.
Greeks, however, liked to constantly improve what they already possessed. Therefore, in the 6th century BC Krezus improves the coins technologically. He ceases to beat them with electrum, and produces them from pure gold or silver. The main places of “mining” were then the city-states of Chalkis, Eretria and Aegina.
Eventually, three monetary systems were created in the Greek world: Ionic, Egeinec and Corinthian.

Ever since the Phoenicians discovered money …

In general opinion, the Phoenicians invented money. This, however, as you see, is not true. Some people think that they did not beat the coins until 365 BC. At a time when the Greeks were already exchanging their obols, the legendary Phoenician traders were still putting on bars or bills. Back Carthagin, the center of the then Mediterranean trade, began to produce coins a little earlier, for it wanted to pay mercenaries from Sicily for them.

Why coins?

Why were coins, actually, ancient? For convenience and trade. That’s for sure, but what is their genesis. Nobody is able to answer this with complete firmness. There are theories that the first coins were … a form of advertising for a given policy or ruler (a bit like local cryptocurrencies today), and only then was it considered that they could be used in transactions. Others argue that the driving force behind the invention was – as often – the war. Money in this form began to appear around the world in more or less similar circumstances. In China, it was the “Warring States Period”, in India also the time of political fragmentation. In Greece, all this coincides with the organization by Greek troops of a professional army (hoplites), whose troops were often hired by other Mediterranean men. How could this actually look like? Let’s move again in time and put in a hoplite situation. He successfully defeated enemies, he gained booty – alcohol, women, everyday goods and luxury goods. The war, however, continues. So how was he to transport this type of bonus? The easiest way to rake was mainly precious metals, because these were still easy to transport (at least compared to mobile harem or basement wine on wheels). Then our hero had a lot of these metals, which he wanted to exchange for other goods more needed in his everyday life. And that where there are customers, there are also sellers began to give birth to the market. However, this is just one of theories.

To be continued…

source of image: imf.org

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