Understanding Money

-Part I-

FROM METAL COINS TO DIGITAL CURRENCY: TRACING THE EVOLUTION OF MONEY AND CURRENCY

Fact or Fiction?

Money is a made-up concept. A fiction made real by a social contract. Whatever we agree is money, becomes money. The form of money changes with each society, placed in the terroir of its time and place.

Initially, commodities, like useful stones and precious metals doubled up as money. However, as humanity journeyed up the exponential path of progress and development, central banks emerged, issuing their own precious metal coins and paper currencies backed by these coins.

However, somewhere between the first and the second World Wars (mainly owing to the need to fund these wars) these forms of commodity backed money gave way to central bank 'fiat' money or currency. Fiat is Latin for 'let it be done', implying that these forms of currencies, act as money because the issuing authority (essentially the central bank) says so. Fiat currencies are thus