How Money Has Evolved Over Time (A Brief History of Currency)
You know what agreed very clearly on the what is money question I think it is the most important question that people can mine for truth or answers really to understand what’s going on in the world today.
So and I guess one of the main answers to that question that a lot of people don’t understand is that it is a technology ultimately right it’s a tool for solving a problem. The problem being the transference of value across space and time what has driven this change like we as you said we started out with kind of prehistoric tools for for satisfying. This function we got to gold and silver and now we’ve gone away from that so the transition you know I said we were gold and silver then in the 11th century the chinese invented paper money so a thousand years ago you know that was the new technology. This paper money it’s lightweight it’s more portable it’s more divisible than this heavy bag of gold. Right and so you know that was new technology a thousand years ago and then you know we you know and then it’s you know 560 years ago the medici family started using what’s called double entry bookkeeping which created the ledger.
Right that’s the ledger technology and so ledger technology we’ve been using for 500 years now and that’s what created the banks. Yeah banks are ledgers they’re just big ledgers and that’s what created the bond market and so all bitcoin is is the same ledger technology that we’ve been using for 500 years with a little added twist to it and the added twist is that it’s distributed and it’s updated every 10 minutes. So it’s distributed around the world to 10 000 nodes and it’s updated every 10 minutes so it’s a decentralized ledger that uses the power of the internet and so we’re not inventing anything new. It’s just the same ledger so I basically call this like triple entry bookkeeping instead of double entry which is basic. Ledger it’s triple entry because it’s being updated every 10 minutes and blasted around the world so we’re all using one universal ledger and so that’s the new technology you know it’s.
You know it’s anything it’s like super special where we’re inventing like fire. But it is you know a very important milestone for humankind because it’s not allow us to get off. You know fiat money money that’s not backed by anything and we go to a hard money standard like we have been on for 3 500 years right right right. Yeah that’s a real important realization too. I think when you’re mining this question is that hard money is the norm.
The past 100 some odd years is the anomaly really whereas we just due to recency bias. I guess we think this is the norm right um and it’s just not the case um and the so the the double entry and debits credits the third entry is basically the time stamp. Right that’s exactly the universe and the distributed nature of it. And the importance of that is a single source of truth effectively right you have one universal ledger you don’t like if you have a jp morgan account and I have a bank of america account.
If I move money or you know if I send you money you’re jp morgan my bank of america i have to reconcile.
You know they have to get together and balance the books right with bitcoin it’s one universal ledger there’s no balancing there’s no reconciliation. That’s needed it’s just i’m transferring you know value to you. It just happens instantly so there’s one like you said one universal form of truth yeah yeah yeah. So simple yet implications so profound and the idea of something just automatically auditing itself reconciling itself. Maybe it’s not fire don’t tell michael saylor that though.
But it is a it’s a simple yet tremendous innovation right for human for scaling him and cooperation right basically very disruptive too. I mean if you think about it you know we’ve been using banks for 500 years we’ve been using accountants yeah and you know audit firms for hundreds of years right. I mean you know their jobs are in jeopardy if this you know grows to be you know at scale.