In early human societies, economic exchange was based on barter. I had beans, you had milk, we agreed on quantities and that was it. As populations grew and interactions expanded beyond the local village, barter became increasingly impractical. The neighboring tribe might want beans but offer furs in midsummer, when nobody needed furs. A compromise emerged: small, rare objects that everyone valued and that were hard to obtain. Shells, stones, and similar items became primitive forms of “money.” They held value because they were scarce and universally accepted.
Once humans learned to work metal, everything changed. Tribes and early states began minting small metal pieces with distinct symbols. Bronze, silver, and eventually gold: the value came from rarity and the amount of metal in each coin. In the Roman Empire, ancient Greece, and Eastern kingdoms, coins served both economic and political roles. The ruler’s face wasn’t decoration; it was a guarantee of value.
After centuries of metal currency, ancient China introduced a revolutionary idea during the Tang and Song dynasties: paper money backed by metal deposits. At first, it worked flawlessly. Then the empire discovered the eternal temptation: issuing more notes than the physical reserves behind them. The first recorded episode of systemic inflation caused by excessive paper issuance begins there.
Civilizations returned to precious metal, but another issue emerged: transport. In medieval Europe, merchants realized that carrying or transporting heavy gold coins exposed them to risk and loss. The solution appeared naturally: receipts representing deposited gold. One merchant held your gold and issued a paper IOU. Another merchant honored it. This became the seed of the modern banking system.
Over time, these receipts evolved into banknotes issued by royal treasuries and eventually by central banks. People trusted them because they were directly convertible into gold. Up until the 20th century, most advanced economies operated in some form of the gold standard.
Everything shifted in 1971, when U.S. President Richard Nixon suspended the convertibility of the dollar into gold. Global finance moved fully into the fiat era: money had value not because it was backed by something physical, but because governments declared it so.
By the 1960s–70s, banks introduced cards and the first ATMs (pioneered in the UK and the U.S., with rapid European adoption). Money became less of a physical object and more of a digital entry.
In 2008, Bitcoin emerged. Satoshi Nakamoto proposed something unprecedented: a system where value was determined not by government decree, but by computational work on a decentralized blockchain. Initially dismissed, Bitcoin gained traction once people realized it couldn’t be easily confiscated, inflated, or controlled by state regulation. It triggered a wave of thousands of digital imitators, most of them worthless, but the paradigm shift was already irreversible.
By 2025, we live in an economic model obsessed with endless growth in a world of finite resources. Central banks now openly experiment with Central Bank Digital Currencies (CBDCs). Their advantages for policymakers are obvious: full traceability, programmable money, the ability to eliminate commercial banks if desired, and even the option to impose expiration dates to force spending.
The psychological shift is profound. Physical money disappearing from your pocket once signaled spending; now you only see changing digits on a screen. Blocking an account becomes a one-click action instead of a bureaucratic process. Money stops being an object and becomes a permission. And permissions can be revoked.
Next chapter: legal methods of resistance.