Where did the money come from? What is the reality of Money?History of Money

 

Beggar to Billionaire Everyone wants to have it It's not just a piece of paper It's an Addiction. It was money that compelled these people who lived in the wilderness to live in these tallest buildings after he changed hunters into blacksmiths, merchants, and monarchs.

Where did the Power of Money, come from? How it was made? And what is Money?

Money is a piece of paper that has no value of its own, It just tells us the value of other things. We work day and night for it but in the end, we give this to others So that we can buy what he has and then that person gives the same money to someone else

So that he can buy what he likes, and so the money goes around the world from here to there.

How much money is in the world right now?

What is visible to you is 40 Trillion $ and which was not visible to you is 1300 Trillion $ 1.3 Quadrillion $.

Where did all this money, come from? Who made it?

1.      Barter System

When there was no evidence of money in 15000 BC, 17,000 years ago, people lived in small tribes and had only one objective: to hunt and survive. But prey is something that not be found easily every day, But hunger strikes every day. It was hunger that forced one tribe to take and give something from another tribe If you give us fresh meat, we will give you our weapons both have benefited from this transaction Because if you take something forcibly You will get it once But not the second time, And so the Barter System was born Giving or taking things. 

The barter system is said to have originated somewhere in Mesopotamian Tribes, Mesopotamia is the name of a region in Southwest Asia where Iraq is today. This is where the Mesopotamian tribes used to live. The barter system changed us People who used to fight each other now, started to live together everyone started trading with each other.

2.      Origin of Accounting

And thousands of years, later when the population of people increased and apart from hunting, they started farming now, Due to which the shortcomings of the barter system started to come to light it was hard to remember. When trading with so many people from whom to take what and whom to give to remember this, we started writing on small pieces of clay which started accounting we started accounting for things.

The problems of the barter system were not going away. The biggest problem was that both parties had to agree to trade you want what I have but I don't want what you have Because of this, the trade could not be done.

3.      Commodity Money

It became very difficult to trade through the barter system, and now we wanted something that everyone wanted, and thus began money. It's not the money you're thinking of as commodity money. We monetized everything that was rare

We also used and everyone was willing to trade by this like a cow, buffalo, goat, ax, knife, thieves, arrow, swords Animal skins Tobacco, Salt Peacock feathers, Whale teeth, Alcohol, Cowry shells, and even humans. It was common to use slaves as money at that time on Yap Island, people used to use big donut-like stones. Who once weighed as much as five tons?They are called Rai Stones Once it was placed, it stayed there forever. 

They just remembered who it belonged to Commodity money made our life easier. However, there was a major issue with it: it was very challenging to determine the value of what I had because each commodity seemed to have a unique value, and we now desired something with a set value and a protracted shelf life. Things like animals and alcohol deteriorate over time.

4.      Metallic Money

Ancient Greece is where metallic money first appeared, 2600 years ago. To create coins with lions and bulls on them, gold and silver were combined. People used to get only two coins after working day and night. They did not even get food from them Look carefully. 

This is the first coin of the world The Lydian Stater It is said that the coins were first introduced by the Chinese in 1000 BC, Who used to make brass and copper coins but, it was not necessary to use them like the Lydian Stater. Following the Lydian Stater, everyone began producing coins, and the ruler of each empire began issuing coins with his own name. Everyone started using coins now because it became very easy to trade through them.

But if you look at it in a certain way metal money was also considered a commodity

If the coins are less it's not an issue, but if they are more, then their biggest problem starts to appear.  700 BC it was a time when overseas trading was booming

And all this trade was done in coins. But the more coins, the more they weigh

Due to their heavy weight, they also took up more space in the ship, and it took a long time to transport them Due to this the risk of coins being stolen increased a lot.

It's easy to count coins but who will count this many coins? Now we need something

Light weighed which we can easily shift, store and count.

5.      Paper Money

There is a very famous saying Everybody likes “progress but nobody likes change” Everyone wants to progress but not everyone wants change And that's what happened with Paper Money. In 1279, the Emperor of Mongol China, and grandson of Genghis Khan Kubla Khan, made the world's first paper money from the bark tree. People don't Kubla Khan used to give these people only a piece of paper in exchange, for their precious sparkling diamonds. 

But who refused to take the paper money of Kubla Khan would have been put to death. Actually it was paper money, but it is called I.O.U I OWE YOU that I owe you a debt, You take this paper and come to take, your gold coins whenever you want And people thought why change it into gold and silver Just trade this paper And like the coins, this idea began to spread outside of China. But unknowingly, such a power was about to begin which was impossible to stop, and that power was the banks.

Origin of Banks:

Because of paper money, international trading increased to this extreme I.O.U's mean paper money of that time is now available to everyone. And here are some people

Who were hungry for money? They took their gold coins from the people and gave them I.O.U's But the I.O.U was something they could print as much as they wanted, And people also started taking that paper money. Because they were afraid of gold coins being stolen and you know how a bank makes money by lending, and now that mini bank started lending IOUs to those people.

Due to this paper money became abundant in the city and because of the abundance of paper money, something came out which is called Inflation.

What was worth one I.O.U increased to ten I.O.U that bank did not have as many gold coins as there was paper money in the entire city. When people found out that the price of their I.O.U was going down, they ran to that bank to get their gold coins.

However, that bank was unable to help any of them. People no longer have faith in banks.

And for many years, nobody gave the bank a second thought; only recently have they begun to hide their gold money within their homes. Due to this, the circulation of money was greatly reduced

And many problems started to appear.

Gold Standard:

In 1816, Britain brought a new law that we would print money as much gold as we had which not cause inflation and debt would also be given a limit. This is called bringing paper money to the gold standard, and soon all the countries began to limit their paper money to the gold standard. Eventually, the USA adopted the gold standard in 1900.

Money cannot be made without bringing something with it that is unavoidable, and that something is greed, regardless of the means, how much you have you always want more. Doesn't matter how much money, we have we always want a little more, a little more, just a little more, And in this little cycle, paper money that was going to make such a turn. After which it was impossible to stop if the country has more money inflation occurs Rise in Prices which is harmful But If the country has less money, there is deflation.

Which is even more harmful 1930s Great Depression and Fiat Money

1930s The USA was in the Great Depression because of deflation (Low Prices)

Because things were so cheap and the companies were not making enough money to pay their employees. Which caused the economy to crash People had neither money nor jobs. And for the solution In 1933 President Franklin D. Roosevelt ended the relationship between the dollar and gold now all that was there was paper money. The banks had their power back, and they knew how to take advantage of it That power is Printing Money and you know what happens with more money.

Inflation And to control it, America created the Central Bank FED Which regulates that there is neither more nor less money in the country But the dollars you could convert into gold Which was an I.O.U for you And now it become only an piece of paper It is what it is It's just a worthless piece of paper It has no value And now it became Fiat Money. You believe that only the US dollar and not any other currency is fiat money.

It makes no difference if it is Pakistani or Indian these are all fiat currencies.

None of these pieces of paper are backed by gold or any other tangible asset. If this document means nothing.

How do we buy everything from it?

Because we just believe that we will get something in return what lies in your banks, Wallets, and lockers is only trust, not money. The value of It has a daily declining worth owing to inflation.

Digital Money

Paper money has eased many of our difficulties. It could be easily counted, handled, and carried anywhere but something that was much needed in this fast-changing world that thing was speed. Paper money can be easily carried but it also takes time, now we need something by which we can transfer money to another in a few nanoseconds. And E - MONEY was launched in 1980s.

Everyone started minting coins after the Lydian Stater, and each emperor started issuing coins bearing his own name. And so the banks don't even have to print anything anymore

Just type some numbers on the computer and the money is made. The truth is that we cannot live without digital money in the world of speed. We can buy everything from the comfort of our homes with just one click Digital money travels from one corner of the world to another in less than a second. However, digital currency also has a serious issue.

Hacking Hacking is challenging but not impossible, and it's not this thing.

Crypto currency

Such money launched in 2009 which is impossible to hack I am talking about crypto currency. BITCOIN Credit cards, Checks, Online Payments All this is done according to the rules and regulations of the government. But Bitcoin is a money that has nothing to do with the government nor is it connected to any Fiat Money (Paper Money) what is there is just some numbers. Only Satoshi Nakamoto's first name is known. Due to the non-applicability of any government rule, it can be easily used in illegal transactions more illegal transactions mean more crime. And the more crime, the more damage to a country.

Whatever the Bitcoin is its Blockchain Technology is thousands of years, ahead from the technology of credit cards and online payments. It is impossible to hack It may take a billion years or more to hack just one bitcoin. When Bitcoin launched in 2009

One bitcoin was worth zero dollars its price was only 1$ in 2011. And the price of one bitcoin today in 2021 is 60,000$. Now whether this is a scam or a real get-rich scheme only time will tell

What is Real Money?

But once look back at this world how much this world has progressed in such a short time in just a few thousand years. We went from gold and silver coins to invisible money.

We made this money for our own benefit, but maybe we are losing it. You work at some place from dawn to dusk, what you get at the end of each month is Just some pieces of paper or some numbers that appear on the screen. You have to understand that the world runs on trust, not money what we see is nothing but illusion Now the question arises what should we do?

Money is a part of our life First of all you have to recognize real money there is only one way to recognize real money. Something that increases, in value over time.

Is Real Money, The value of paper money decreases every year due to inflation?

And truth be told this cycle is never going to stop. You can avoid this thing

By investing in real money, which has value in itself. You know that no matter, how much money there is in this world, if all of it is shared equally among every person that money will go back.

Where it came from But Why?

Because all the rich people in this world Understand money and know it. They don't work for money, but money works for them and the day you understand it. Your life will be changed forever before doing all this you need to educate yourself financially. The time you waste cursing the government and inflation Spend the same time on your financial education because nothing is going to change. You have to change yourself more you learn, the more you earn.