Evolution of Money: From Free Market to State Monopoly

1. Spontaneous Origin of Money

• Money was not created by governments but emerged naturally in markets.

• People began using certain goods (salt, cocoa, shells, livestock, metals) because they were easier to trade.

• Over time, gold and silver prevailed as the most efficient money due to their properties: durability, divisibility, scarcity, among others.

2. State Appropriation

• Once gold and silver were universally accepted, kings and governments monopolized coin minting, stamping them with their seal.

• Legal tender laws were introduced, forcing people to accept certain currencies by decree.

• With the rise of central banks, physical money was replaced by paper (banknotes) that in theory represented gold, but in practice allowed the monetary supply to expand beyond reserves.

3. The Break with Gold

• In the 20th century, states ultimately abandoned the gold standard.

• In 1971, Richard Nixon ended the dollar’s convertibility into gold, establishing a regime of pure fiat money (based on trust in the State, not on tangible backing).

• Since then, governments have used money printing to finance deficits, wars, and bank bailouts, generating inflation and loss of purchasing power.

4. The Birth of Bitcoin (2009)

• After the 2008 financial crisis, Bitcoin emerged as a non-state, decentralized digital money with immutable rules.

• It limits issuance to 21 million coins, returning to the idea of hard scarcity like gold.

• It revives the spirit of market-driven spontaneous money, but with technology that makes it resistant to censorship, counterfeiting, and political manipulation.

5. Separation of Money and State

• Just as the separation of Church and State led to greater civil liberties, Bitcoin proposes the separation of money and State.

• It is a return to a basic principle: money should arise from the market and serve the people, not the rulers.

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📌 In summary:

Spontaneous money → State capture → Fiat money → Bitcoin restores sovereignty.