Countdown to Christmas
23 - Money
- Universal Medium of Exchange: Before the invention of money, humans relied on primitive forms of exchange, like truck and barter (“I’ll give you 25kg of carrots for 1kg of meat,” and so on). The introduction of money as a universal medium of exchange overcame the complexities of barter, making trade faster, smoother, and far more reliable.
- Unit of Account: Having a unified unit of account not only simplified the exchange of goods and services but also made transactions and contractions possible between strangers across countries and cultures. In other words, money turned into fuel for global trade and economic specialization!
- Store of Value: Money facilitates not only transfers across space; but also across time. Its invention uniquely enabled humanity to preserve wealth over time—providing individuals and societies with the ability to plan for the future. This transformative feature of money forms the very foundation of civilization.
Christmas Miracle
Money is one of those classic innovations that cannot be attributed to a single inventor. It evolved over time to meet the various needs of human societies, from commodities and coins to modern paper currency. However, it’s important to remember that the creative, transformative process of innovation never stops.
And so today, we may be, in fact, amidst a new monetary revolution, with financial assets like Bitcoin challenging and reimagining the outdated framework of fiat money. The future of money is unfolding before our eyes—let’s see where it takes us.
I’ve always found holiday gift-giving a bitweird. Because it reminds me of theprimitiveness of prehistoric barter. I mean,there have been way too many times where I had to return a sucky gift for good old cash—just to get something I actually value. If we were serious about value transfer, we would change Christmas traditions towards direct cash transfers instead of maintaining the inefficiencies of gift-giving.
But okay, I get it. There is some cultural value in this nostalgia for barter, I suppose. So, let’s at least honor the invention of money by remembering it this Christmas. Problem: Nothing will radicalize you as much as realizing that central banks killed one of the main promises of sound money: store of value!
