# A Brief History of Currency
URL:: https://brilliant.org/courses/cryptocurrency/introduction-101/brief-history-currency/2/
Author:: brilliant.org
## Highlights
> Bartering can be simple and direct, but getting what you want in exchange for what you have might require coordination between more than just you and the person who has what you want.
> A solution to the issue of coordination is money — something we can use as a medium of exchange. ([View Highlight](https://read.readwise.io/read/01gjrcwvqn9084bx9df60tpnc0))
- Note: Money is like a least common denominator-- it's distilling everyone's preferences down to something that can be traded for anything else.
> These're called commodity monies, since their value comes from the fact that they're made out of a commodity — an economically useful good whose units are interchangeable. Sulfuric acid is an example of a commodity since any batch is essentially indistinguishable from any other batch. ([View Highlight](https://read.readwise.io/read/01gjrczfvsy66xn4pjrb68y00n))
- Note: Good currency is essentially indistinguishable between instances of it.
> Some solutions are to use a commodity that's more convenient without worrying if it can meet a basic need or to trade things that represent the commodities. This makes the money system more convenient, but it requires a lot more trust. ([View Highlight](https://read.readwise.io/read/01gjrd1pnntfdfb6w3dqkn06fe))
- Note: The convenience of a currency is more important than its usefulness in itself.
> For thousands of years, precious metals like gold and silver were used to mint coins for currency because they have a number of convenient characteristics:
> • They don’t degrade over time.
> • They’re rare enough that it takes a lot of work to find more.
> • They’re common enough that it's possible to find more.
> • The amounts that most people would have are easy to carry around. ([View Highlight](https://read.readwise.io/read/01gjrd2wybvp064wjexry31q6j))
> That's because it's backed by governments. It’s easy to trust that the monetary system will keep working and that others will continue to honor the value of money, because large, powerful entities make claims that they’ll enforce this system. ([View Highlight](https://read.readwise.io/read/01gjrd3f3gfp8ryf0hp4mwj77p))
> Cryptocurrencies accomplish a monetary system that doesn't depend on trust in a central authority or the people you're transacting with. It requires trust in mathematics and certain algorithms. ([View Highlight](https://read.readwise.io/read/01gjrd524dayfdtpx0s6aadwbb))
- Note: In Maths we trust!
> Because of how the rules of cryptocurrencies were designed, it's difficult to control them unilaterally. ([View Highlight](https://read.readwise.io/read/01gjrd5k7vtf5vz43pr05cwf71))
---
Title: A Brief History of Currency
Author: brilliant.org
Tags: readwise, articles
date: 2024-01-30
---
# A Brief History of Currency
URL:: https://brilliant.org/courses/cryptocurrency/introduction-101/brief-history-currency/2/
Author:: brilliant.org
## AI-Generated Summary
Before we consider money, we can look at a system for exchanging goods and services that's easier to understand — bartering.
## Highlights
> Bartering can be simple and direct, but getting what you want in exchange for what you have might require coordination between more than just you and the person who has what you want.
> A solution to the issue of coordination is money — something we can use as a medium of exchange. ([View Highlight](https://read.readwise.io/read/01gjrcwvqn9084bx9df60tpnc0))
Note: Money is like a least common denominator-- it's distilling everyone's preferences down to something that can be traded for anything else.
> These're called commodity monies, since their value comes from the fact that they're made out of a commodity — an economically useful good whose units are interchangeable. Sulfuric acid is an example of a commodity since any batch is essentially indistinguishable from any other batch. ([View Highlight](https://read.readwise.io/read/01gjrczfvsy66xn4pjrb68y00n))
Note: Good currency is essentially indistinguishable between instances of it.
> Some solutions are to use a commodity that's more convenient without worrying if it can meet a basic need or to trade things that represent the commodities. This makes the money system more convenient, but it requires a lot more trust. ([View Highlight](https://read.readwise.io/read/01gjrd1pnntfdfb6w3dqkn06fe))
Note: The convenience of a currency is more important than its usefulness in itself.
> For thousands of years, precious metals like gold and silver were used to mint coins for currency because they have a number of convenient characteristics:
> • They don’t degrade over time.
> • They’re rare enough that it takes a lot of work to find more.
> • They’re common enough that it's possible to find more.
> • The amounts that most people would have are easy to carry around. ([View Highlight](https://read.readwise.io/read/01gjrd2wybvp064wjexry31q6j))
> That's because it's backed by governments. It’s easy to trust that the monetary system will keep working and that others will continue to honor the value of money, because large, powerful entities make claims that they’ll enforce this system. ([View Highlight](https://read.readwise.io/read/01gjrd3f3gfp8ryf0hp4mwj77p))
> Cryptocurrencies accomplish a monetary system that doesn't depend on trust in a central authority or the people you're transacting with. It requires trust in mathematics and certain algorithms. ([View Highlight](https://read.readwise.io/read/01gjrd524dayfdtpx0s6aadwbb))
Note: In Maths we trust!
> Because of how the rules of cryptocurrencies were designed, it's difficult to control them unilaterally. ([View Highlight](https://read.readwise.io/read/01gjrd5k7vtf5vz43pr05cwf71))