For the past 3,000 years, money has become an essential part of the way we exchange goods and services. It has helped humanity to survive and grow, enabling people to exchange their hard work for food, shelter, transport and more.
However, traditional forms of currency throughout the world, such as the US Dollar or Pound Sterling, have not always been used as the dominating medium of exchange. Many mediums have gained dominance before these paper currencies and, almost certainly, many will after them.
Recently, new mediums of exchange have emerged across the globe including Bitcoin, Litecoin, Ethereum and more. These currencies fall under what is known as a cryptocurrency, using blockchain technology to create a decentralised system, where transactions are stored in a public online database.
The evolution of Bitcoin is neatly summarised in this infographic provided by Betway Casino:
From exchanging bronze replica tools to transferring digital coins, money has, and continues to undergo, creative and exciting new evolutions. This piece takes a look at the history of how money came to be, how its developed since, and what the future may hold for the medium of exchange.
The Creation and evolution of money
It is generally assumed that before a form of money was implemented, exchanges were made through bartering. Bartering is a method of exchange where one form of goods or services are exchanged for another. Bartering means these goods or services are traded directly, with no form of money being involved.
Over time, a form of bartering began to almost develop into a currency of its own, trading goods such as animal skins and weapons. This spread throughout the globe, and became the medium of exchange.
Around 1100 B.C. China began to replace this medium of exchange with something more easily transportable. Small, bronze replicas of tools that were traded became the new medium, which were then redesigned into circles to stop people from hurting themselves when handling the miniature tools.
These circles were the first coins used as a medium of exchange, with Lydia (now Turkey) creating the very first minted coins in 600 B.C.
Coins began to be used throughout the rest of the world, along with paper money that was issued and regulated through private organisations (such as banks).
Money eventually then began to be issued and regulated through governments, and brought the world to its current medium of exchange.
The rise of cryptocurrency
In 2008, pseudonymous author Satoshi Nakamoto published a paper online which held the blueprints for a cryptocurrency. This cryptocurrency was called Bitcoin, and used blockchain technology to create an effective decentralised system.
Later launched in 2009, Bitcoin became the first of its kind, offering users virtual currency that could be exchanged for various goods and services.
A few years after its launch, Bitcoin began to increase in value, reaching its highest value ever in 2017 at $19,783.06. Investors began to see great returns from their Bitcoin investments, including US rapper, 50 Cent, who accidentally made over $8 million from coins that were originally worth $400,000.
However, whist Bitcoin has provided great returns, and has been dubbed by many as the investment of the past decade, it’s value does fluctuate – dropping by a third in only 24 hours of reaching its $19,783.06 peak.
After the rising popularity of Bitcoin, other cryptocurrencies emerged on the market, creating a whole new realm of money fit for the current online-centric age.
Whilst coming and going in many different forms, money has become an integral part of society, and continues to be so even within the most advanced evolutions of exchange currently available.