The Evolution of Money
So how did ‘money’ come to be?
This is a question of much interest here at Amber.
If we look back throughout history, we see that money emerges in different places around the world. It appears in many different forms, at different times, but ultimately coalesces towards the most broadly accepted format. A great example of this is gold.
Because the “market good” or “object: with the best attributes always wins.
Money actually started as promises or debt recorded on a ledger. These ledgers account for some of the earliest recorded forms of human language.
This communication of value has evolved throughout the course of human history.
In the early days as we ventured beyond our immediate surrounds, we looked for objects that were rare, that could be used to represent work and value. These objects enabled society to develop and helped us trade and collaborate with more and more people.
As this new tool for collaboration evolved, the object with the best properties emerged the winner and over time all trade naturally converged in consensus upon the most useful and widely used version of money.
Note: This natural selection process makes money a convergent network, with a winner takes all result. In a winner takes all environment, competitors are slowly displaced one by one until only one remains. This natural phenomenon is why gold has historically been converged upon by so many disparate societies over the course of human history.
Fiat: Latin for ‘let it be done’, the term denotes a formal authorisation, ie; fiat money is money by ‘decree’. When talking about fiat currency, we refer to paper (or digital) money which is government-issued.