Historically, COMMODITIES such as salt, seashells, and cattle were used as a medium of exchange, for then leaving the stage to monetary metals such as gold and silver.
Out of all the metals, though, GOLD was the scarcest and the best tool to preserve value across space-time.
However, since gold is physical and heavy, it lacked portability, and so it was expensive to transport and secure, limiting its utility as money in terms of expressing value across space.
Due to deep changes in society and the evolving nature of the market, the free forces that influence it made necessary some changes to money.
Government and institutions started issuing currencies redeemable for gold, also called REPRESENTATIVE MONEY, nothing else than a certificate or a ‘token’ that represented a claim of the person or party for the currency to be exchanged for something of value.
Banks in the specific, improved gold ability to express value across space, but it presented a problem:
It is attested that this TRUST has repeatedly been broken during history, and in 1971, the peg to gold was broken entirely, giving central banks unlimited capacities to compromise the scarcity of money arbitrarily, hence stealing money from society and gravely deepen the gap between rich and poor.
Let’s think about the US Dollar $, which initially was used as a ‘legal claim’ for redeeming gold stored in banks vaults, but on Friday, August 13, 1971, the president in charge, Richard Nixon took the US off the gold standard, causing the slow but inexorable devaluation of the dollar.
The abandonment of the gold standard led the way for an evolution (although quite debatable) of money into its current form, the FIAT MONEY (deriving from Latin ‘let it be so / let it be done’) basically an authority that the government opposes to people and it bases itself on the concept of TRUST on the government saying the piece of paper holding in your hands has value.
