Discussion - A Brief History of Money

I’d like to see Anil in person as part of these lectures but this is very good information and very iwell done…


If you ever come across that info again, please don’t forget to share it.

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Hello, fellow students in this course, I just started this course and I’m excited to see how it unfolds. I do have a Bachelor’s Degree in Business Economics and currently a Grad Student in Economics, I hope this doesn’t come across as me trying to boast or anything, but having prior knowledge on this field allows me to finally give back something to this knowledge-sharing-community.

Feel free to ask me anything related to this course, or economics in general, I would do my best to be of help. Happy learning to all!

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My question has always been who decides what is of value? Not trying to come off as naive but from time to time I think about this.
For example, who found gold in the ground one day and decided-- Oh this is something that will bring value to life. This goes for diamonds and such and a whole list of things, etc that have been given value. I understand the effort it takes to mine these and other things and the universality of it as a means of exchange but I have those moments sometimes when I think, what is the point? I can´t eat it, I can´t drink it. At the end of the day we need food and water for nutrition. Last I checked, gold and diamonds and the like are not very filling nor nutritious, but maybe I am wrong. Aesthetically beautiful of course, once the extra work is put in to polish, cut it or whatever the end process may be to make it appealing to the eye.
If I have a piece of gold, a diamond or a mango in my house and I am hungry/ thirsty, of course I and anyone will reach for the mango. Granted, I could use the gold to go out and BUY a mango but that brings me back to my silly question. I give that gold to someone for a mango to quench my hunger and that person gives to the next and the next and the next. We end up passing from person to person this thing that utterly has no sustaining value to biological life itself but we are delighted to get it and hold it until we pass it to the next person. An endless cycle! Again, not trying to come off as naive but sometimes I just wonder, who decides what is of value?
Maybe this belongs in more of a philosophical chat space but after viewing this section’s lectures, reading the Debasement piece and reading a good portion of these well written and informative posts, I find myself in that head space of wondering, who decides whats of value and on top of that I add the standard of value? Now back to reality! Gotta get that MONEY to SURVIVE… :smile:
Maybe somewhere here can settle this for me once and for all :smile:

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Hi @jayharden1, I commend you for thinking outside the box and wondering who really decides about the value of something. This is actually an opinion-based question and my answer is just composed of my own thoughts as well.

First, we need to understand that we cannot live alone or independently of others, we will always need or want something from another person simply because we cannot produce everything on our own. That’s where trade started - “I need something from you and you might need something from me”.

Now as explained in one of the topics discussed, the Barter system is an inefficient way of placing value on items that we trade, there’s also the factor of the other person not wanting what you have. This is where the concept of money entered, where money should be divisible, portable, durable, fungible, that functions as a medium of exchange and store of value.

Going on the topic of value, no one really decides on what is the absolute value of a given commodity (gold, silver, diamond). It all depends on the relative scarcity of the commodity itself, if Gold is relatively more scarce than Silver then it should have a greater value, If a banana is easier to find than Gold then a banana should be valued less, and this is decided collectively. This system is flawed because no one truly knows the exact amount of a given commodity out there, we might be shocked to find out that in the future, an asteroid full of diamonds will crash on the earth and make diamonds worthless due to its relative scarcity.

Going back, if you can theoretically produce everything on your own, then you would not need money or any medium of exchange.


I get what you´re saying my friend, truly. My post was just me thinking out loud and having some fun. One of those moments :smile: I guess in the end it does simply come down to adoption as I keep hearing people say on the crypto channels. We all agree that this one thing is the thing and the likes there of. Thank you for engaging, I really appreciate it. I’m new to all this money talk. Never had an interest in it on a level deeper than getting some and using it to go about my life; never wanting to get into all the fuss, if you get what I mean. Now I am hype about the new knowledge I am acquiring about how the world of money operates and its origins.
Having a bit of skin in the game now, let´s make crypto the NEXT “thing” :smile: :+1:

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Hello All, I have an MBA and curious how a lot of this history is left out of the “schooling” lol. Look forward to learning.


The Great Debasement illustrates how a central entity can manipulate the value of currency at the peril of the public. Henry VIII, like other heartless leaders, cared more about his lavish lifestyle than the tax payer. The value of a currency was manipulated when there was hard metals backing it. Imagine a world in which a currency without anything backing it can be manipulated, oh wait…

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Hi CryptoXyz,
You make some interesting points. However, I am beginning to question whether the “Barter System” was really something people practiced. You wrote the following, which caught my attention “the Barter system is an inefficient way of placing value on items we trade, there’s also the factor of the other person not wanting what you have.” The latter part of your statement made me think that there is a strong possibility that the practice of bartering is a myth. If there is the factor of the other person not wanting what you have, then bartering wouldn’t be possible and most likely never happened in history.

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Hi Madrid,

Your belief whether the “barter system” happened or not is up to you, no one will judge you for your opinion, but here’s my thoughts (I have no proof for this by the way :sweat_smile:).

For me, the barter system happened because traders coming from the sea and bringing goods only found in there places can entice locals and thus can be manipulated that the goods foreigners bring is really valuable (even if it is not). With this asymmetric information, traders can over value the goods traded based on what the sellers tell them (it works like the modern day sales-pitch - which can also be used to scam people).

Simply put, even if you don’t want what I have, I can manipulate your thoughts (if you have no information about what I’m selling) and make you believe that you really want what I have. Hope this helps, this is purely my opinion though

Have fun learning!

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Just to add: If there is a factor of the other person not wanting what you have, then there may also be the possibility that the other person wants what you have. Just some thoughts on my mind though :sweat_smile:

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I appreciate you mentioning that you have no proof. I am willing to entertain these thoughts further. You give the scenario of traders coming from the seas and bringing goods, which can be manipulated. But, this does not resolve the issue of the “double coincidence” of want problem. For instance:

Josh has potatoes and wants shoes
Paul has shoes and wants laces

A one to one barter is mostly likely not going to occur between Josh and Paul unless a multilateral exchange is possible. Meaning finding a third person: Susan who wants potatoes and has laces.

Susan exchanges her laces for Paul’s shoes. Then Susan exchanges shoes for Josh’s potatoes . This is a very cumbersome way of bartering, which depends highly on circumstance of place, time, and value. Furthermore, manipulating another individuals thoughts into believing what I have is what you want appears to be more applicable in a world of fantasy as way to explain what economies were like prior to the exchange of money.

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You’re absolutely right about the “double coincidence” problem, also it is not really solved by manipulations (which I mentioned earlier). Hence, the creation of money as a medium of exchange.

Undergoing a barter system, early civilizations recognized this “double coincidence” issue and somehow came up with using something as a medium of exchange, a financial yardstick that measures all other goods’ value. Early money like salt is an example.

My thoughts are, the society or system cannot improve without facing problems like the double-coincidence issue. Overcoming this issue led to the creation of “some form” of money, and when the problem of using precious metals as money led to the creation of Fiat (paper) money. Then as issues with Fiat arise, society will turn to a new form of money or currency.

Again, the Barter system may be a myth, but there would always be another system that caused issues and problem which led to the creation of “money”, and as of this moment, majority (including myself) believe that the issue started with the Barter system. These are just my thoughts though

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Good discussion. With this in mind, I am starting to believe that the creation of virtual money and coins were in existence before the idea of barter became a prominent thought amongst economists. Meaning, there is evidence throughout history that money existed going back to the Sumerians and most likely earlier. On the other hand, there is no historical evidence to prove that bartering ever existed.

In fact, I believe that the order economists provide in regard to the creation of money is incorrect. It appears that virtual money is the first on the pecking order. Then came coins even though their use was spread unevenly.

This leads me to believe that bartering is an accidental by-product of money. In the minds of traditional economists people bartered when they did not have money. Yet, these economists provide no evidence of this. It is this myth that is widely believed today, which provides economists an easy way to explain the unknown or what cannot be proven.

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“Overcoming this issue led to the creation of “some form” of money, and when the problem of using precious metals as money led to the creation of Fiat (paper) money. Then as issues with Fiat arise, society will turn to a new form of money or currency.” This is a good point you make. The issue appears to be the difference and challenges between hard and soft money as well as issues with the qualities of money such as being divisable, portable, durable, and fungible. I should also mention issues of debasement too.

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I have read a quote that is worth repeating because it summarizes the way money is viewed by some, including myself. “Money is…a complete abstraction—one that we are all intimately familiar with but whose growing complexity defies our comprehension” (https://spectrum.ieee.org/at-work/innovation/a-brief-history-of-money).

Adding to this complexity of abstraction is the modern phenomenon of virtual currency where the value changes rapidly.

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I have a question ?

Lets say i start my own token(cryto) ,eg 21million token max supply. how does this token have value? is it back from something of intrusive value like gold?? need someone to explain


Hey @ShinForex, hope you are ok.

That’s depends completely on what your token purpose is, so it not only about creating a token, thats kinda easy, the real deal is about what i can do with it?

Bitcoin for example propose a use case for a new monetary protocol, Ethereum propose Smart Contracts, Dogecoin propose such pump (joking).

So the value will come based on the adoption of your token utility (along other factors such as max supply, network security, ect…)

Hope I explained myself good, if not let me know :nerd_face:

Carlos Z


The first barter exchange I could remember was Pokemon cards.
I remember exchanging all of my energy cards for 1 mint condition uncommon card. An example where I had determined there was no value to my energy cards (because I never actually played the game), but saw more value in the Pokemon themselves as a collectors item. We both walked away satisfied, so I saw it as a fair trade.


Is kind of a barter exchange if you sell your alts for BTC?