Bitcoin is like ancient Sumer - Due.com

Wednesday 14 September 2016

Having taken an interest in the origins of money, I wanted to repost this article from John Rampton’s blog on Due.com.

In previous articles I’ve looked at the subject of how money originated and what purposes it served to those early pioneers - all through the lens of bitcoin and cryptocurrency, of course. I’ve had a chance to unpack those thoughts a little more fully in a longer article on John Rampton’s site, Due.com. You can read the whole thing at https://due.com/blog/first-last-word-money-bitcoin-like-ancient-sumer-federal-reserve/, but the basic premise is that bitcoin is much more like the first forms of true money than what we now accept as money.

Early money was very different to the kind of money we use today. It took many forms - grain, cows, precious metals - but the earliest iterations of what we can consider true cash seem to have arisen in the huge temple complexes of Ancient Sumer. It took the form of silver pieces, nothing more complex than that.

Temple

The first true money may have been developed and formalised in Sumerian temple complexes

Later on, kings and states started issuing coins - a pretty useful innovation that guaranteed weight and purity of the metals used, but that also opened the door to abuses. And really, because of the temptation to make money from seigniorage, it was downhill from there. Fiat money was the logical end point of that trajectory, and we know where that led. Bitcoin is arguably closer to Sumerian and early money - basically, bullion - than to anything since.

'Arguably for the first time since the development of coinage, more than 2,500 years ago, cryptocurrencies like bitcoin are returning money to its original purpose, without the inherent power dynamic that state- and bank-controlled issuance brings. Of course, fiat money isn’t going anywhere in a hurry, and those who claim that bitcoin will replace one or other national currency are likely to be waiting a long time (there are, after all, advantages to state-sponsored currencies, as well as vested interests). There will, most likely, ultimately be a plurality of different forms of money, catalyzed by blockchain technology – perhaps even a free market of competing currencies similar to the one foreseen by the Austrian economist Friedrich Hayek in The Denationalization of Money. These will include blockchain-improved versions of fiat currencies and other assets. The Waves platform, for example, was designed to bridge the gap between the complexities of the 21st century monetary system and the blockchain, as well as allowing new financial instruments like gold and silver on the blockchain, and much else besides.'

You can read the full article on the Due.com blog at https://due.com/blog/first-last-word-money-bitcoin-like-ancient-sumer-federal-reserve/ or on the Huffington Post.


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