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Money History

Money did not start as paper or digital systems.

It evolved through stages:

1. Barter system​

People directly exchanged goods. Problem: no standard value and difficult matching of needs.

2. Commodity money​

Items like gold, salt, and shells were used. Better because they were scarce and widely accepted.

3. Gold standard​

Money was backed by gold reserves. This added trust and stability.

4. Fiat money​

Modern currencies are not backed by physical assets. They rely on government trust.

Problem with fiat systems​

  • Inflation reduces purchasing power
  • Central control over supply
  • Dependence on financial institutions

This sets the stage for Bitcoin.