A brief history of money and its development into the digital economy of today.

I recently went on a journey of learning how money evolved over time. It's quite a wild ride of innovation. Here's my journey: <br><br>Long ago, we used Bartering as the primary means of exchange. It was not effective. <br><br>Then, someone invented the idea of money, which could be used to represent goods and services. The most common commodity used to represent money was Gold and Silver. <br><br>This is why the term "Gold and Silver Standard" was coined. It meant that every country's money supply was backed by a physical commodity of Gold or Silver. If you had $100 in your bank account, the bank would have $100 worth of Gold or Silver backing every dollar of your money. This system ensured that every dollar printed could be exchanged for one dollar's worth of a commodity like Gold or Silver.<br><br>The problem with this system was that it limited economic growth. Imagine you wanted to start a business. You would need to go out and physically dig up Gold or Silver to back every dollar of funding. This was obviously limiting. <br><br>In 1971, the US abandoned the Gold and Silver standard, and became what's called a Fiat Currency. Fiat Currency means the US government can print as much money as it wants, without needing to have any physical commodity to back it. <br><br>If you wanted to start a business now, you can simply go to a bank and borrow money. The bank then prints new money to give to you. This system is known as fractional reserve banking. The bank only needs to have 10% of the money it lends in reserve, meaning if it lends $1000, it only needs to have $100 in reserve. <br><br>This system worked well until the Great Recession in 2008. Many people defaulted on their home loans, and banks didn't have enough capital to absorb the losses. <br><br>To prevent another Great Recession, central banks around the world printed more money than ever before. In the US, the Federal Reserve printed $4 Trillion in new money in 6 months. <br><br>The hope was that by printing more money, consumers would have more money to spend, businesses would see a surge in demand, and the economy would recover. <br><br>The strategy worked. The economy recovered, and stocks skyrocketed. <br><br>However, wealth inequality became a huge issue. The rich got richer because they owned stocks. Everyone else didn't benefit as much because most people don't own the means of production (i.e. stocks). <br><br>Today, we see a new wave of innovation in digital currencies like Crypto and stablecoins. <br><br>I think we will see a world where money becomes even more digital in the future. Imagine having a wallet on a mobile device where you can hold money, send money, buy things, etc. We're already seeing that today with Apple Pay, Google Pay, and the rise of the Internet. <br><br>That's my journey on how money evolved. It's quite fascinating to see how it changed over time.