𝗦𝘁𝗮𝗰𝗸 𝗮𝗻𝗱 𝗛𝗼𝗱𝗹 𝗠𝗼𝗿𝗲 𝗯𝘆 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗠𝗼𝗻𝗲𝘆

And understand money by reading 𝘚𝘩𝘦𝘭𝘭𝘪𝘯𝘨 𝘖𝘶𝘵, by Nick Szabo.

Published 6 years before Satoshi Nakamoto appeared on the scene, 𝘚𝘩𝘦𝘭𝘭𝘪𝘯𝘨 𝘖𝘶𝘵 is a deep-dive into the origins of prehistoric money, and the stage that set it to evolve into its more modern forms.

When it comes to answering questions about monetary history, 𝘵𝘩𝘪𝘴 𝘪𝘴 𝘰𝘯𝘦 𝘰𝘧 𝘵𝘩𝘦 𝘣𝘦𝘴𝘵 𝘥𝘰𝘤𝘶𝘮𝘦𝘯𝘵𝘴 𝘵𝘩𝘢𝘵 𝘐 𝘳𝘦𝘧𝘦𝘳𝘦𝘯𝘤𝘦 𝘧𝘳𝘰𝘮 𝘮𝘺 𝘤𝘰𝘳𝘱𝘶𝘴!

Keep reading for 5 of my insights from this document👇

𝗜𝗻𝘀𝗶𝗴𝗵𝘁 #𝟭: 𝗩𝗶𝘁𝗮𝗹 𝗙𝘂𝗻𝗰𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝗣𝗿𝗶𝗺𝗶𝘁𝗶𝘃𝗲 𝗠𝗼𝗻𝗲𝘆

Primitive forms of money like wampum, shells, and hand axes enabled vital social functions like trade between tribes, dispute settlements, and tributes. These early currencies became valuable from their 𝗽𝗼𝗿𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆, 𝗱𝘂𝗿𝗮𝗯𝗶𝗹𝗶𝘁𝘆, 𝗮𝗻𝗱 𝗿𝗲𝘀𝗶𝘀𝘁𝗮𝗻𝗰𝗲 𝘁𝗼 𝗰𝗼𝘂𝗻𝘁𝗲𝗿𝗳𝗲𝗶𝘁𝗶𝗻𝗴. Their critical transaction-enabling properties help explain why ancient humans devoted substantial time to collecting and producing them.

𝗜𝗻𝘀𝗶𝗴𝗵𝘁 #𝟮: 𝗚𝗲𝗻𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗦𝘂𝗿𝘃𝗶𝘃𝗮𝗹 𝘃𝗶𝗮 𝗜𝗻𝗵𝗲𝗿𝗶𝘁𝗮𝗻𝗰𝗲

Passing tools, weapons, clothing, and status symbols to descendants enabled wealth inheritance unknown among animals, likely aiding human survival. Collectibles provided stores of value that 𝗯𝗿𝗶𝗱𝗴𝗲𝗱 𝗱𝗼𝗻𝗼𝗿𝘀' 𝗱𝗲𝗮𝘁𝗵𝘀 𝗮𝗻𝗱 𝗵𝗲𝗶𝗿𝘀' 𝗰𝗼𝗺𝗶𝗻𝗴-𝗼𝗳-𝗮𝗴𝗲, and eased mismatches of timing. Such collectibles also symbolized office titles for 𝘰𝘳𝘥𝘦𝘳𝘭𝘺 𝘪𝘯𝘩𝘦𝘳𝘪𝘵𝘢𝘯𝘤𝘦.

𝗜𝗻𝘀𝗶𝗴𝗵𝘁 #𝟯: 𝗢𝗽𝘁𝗶𝗺𝗮𝗹 𝗧𝗿𝗶𝗯𝘂𝘁𝗲 𝗘𝘅𝘁𝗿𝗮𝗰𝘁𝗶𝗼𝗻

Conquering tribes were incentivized to accurately value defeated groups’ wealth when extracting tribute, which optimized revenue overall. Conversely, victims tried hiding collectibles in order to throw off their captor’s estimates. 𝗜𝘁 𝘄𝗮𝘀 𝘁𝗵𝘂𝘀 𝗰𝗿𝗶𝘁𝗶𝗰𝗮𝗹 𝘁𝗼 𝗿𝗲𝗹𝗶𝗮𝗯𝗹𝘆 𝗺𝗲𝗮𝘀𝘂𝗿𝗲 𝘃𝗮𝗹𝘂𝗲, which drove everyone’s preferences toward easily assayed shells and metals.

𝗜𝗻𝘀𝗶𝗴𝗵𝘁 #𝟰: 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝗯𝗹𝗲𝘀 𝗮𝘀 𝗦𝘁𝗮𝗿𝘃𝗮𝘁𝗶𝗼𝗻 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲

Portable and durable collectibles were directly useful as stores of value for food during lean times. Bearers of such collectibles could trade them for rights to hunt or gather on another’s land. This food conversion potential gave these collectibles an 𝘢𝘥𝘷𝘢𝘯𝘵𝘢𝘨𝘦 𝘰𝘷𝘦𝘳 𝘶𝘵𝘪𝘭𝘪𝘵𝘺 𝘨𝘰𝘰𝘥𝘴, which were vulnerable to spoilage and glut.

𝗜𝗻𝘀𝗶𝗴𝗵𝘁 #𝟱: 𝗠𝗼𝗻𝗲𝘆 𝗘𝘃𝗼𝗹𝘂𝘁𝗶𝗼𝗻 𝗗𝗿𝗶𝘃𝗲𝗻 𝗯𝘆 𝗖𝗼𝗴𝗻𝗶𝘁𝗶𝘃𝗲 𝗖𝗼𝘀𝘁𝘀

Mental accounting limits made precise memories and valuations 𝘸𝘪𝘵𝘩𝘪𝘯 tribes far easier than between them. This drove preferences for tokens encapsulating estimable worth, which eased the burdens of reciprocal altruism, and 𝘢𝘭𝘭𝘰𝘸𝘦𝘥 𝘴𝘵𝘳𝘢𝘯𝘨𝘦𝘳𝘴 𝘵𝘰 𝘮𝘢𝘬𝘦 𝘦𝘹𝘤𝘩𝘢𝘯𝘨𝘦𝘴 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘵𝘩𝘦 𝘯𝘦𝘦𝘥 𝘧𝘰𝘳 𝘵𝘳𝘶𝘴𝘵. Token money thus arose from 𝘂𝗻𝗮𝘃𝗼𝗶𝗱𝗮𝗯𝗹𝗲 𝗰𝗼𝗻𝘀𝘁𝗿𝗮𝗶𝗻𝘁𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗵𝘂𝗺𝗮𝗻 𝗺𝗶𝗻𝗱.