Metals As The New Currency.

The Group 11 Elements as they're fondly called, comprised of those Metallic Chemical Elements and Alloys which have been used to mint coins known as Copper, Silver, and Gold. Bronze on the other hand was obtained from adding tin or other metals to copper. Hence, Gold, Silver, Bronze or Copper were the principal Coinage Metals of the ancient world, the medieval period, and into the late modern period when the diversity of these metals increased.

I'm sure you're thinking, ‘ I didn't sign up for a chemistry class now did I? ‘

Sure you didn't. Hold on, I'm taking you somewhere. I want to tell you how coins became a currency, and also show you when exactly money stopped being money in history. I'm sure you'd like that, good. Let's get to understand better what precious metals really are.

Precious Metals

Precious Metals are rare, naturally occurring metallic chemical elements of high economic value. In simple terms, a metal is deemed to be precious (of value) if it is rare. The three naturally occurring chemical elements of group 11 in the periodic table, Gold, Silver and Copper was also called coinage metals as they were used to mint coins due to their malleable texture. But before we delve deep into the transformational periods in history where these coins were first used as a monetary system, we’ll talk about how the barter systems gave way to the monetary systems first.

Before we do that, let's deviate a little. I would like to bring your attention to the word ‘rare’. Why is this important you'd ask? Money in itself has three qualities that make it money.

Scarcity-Store of Value-Acceptability.

Hence, if anything is seen to possess these three qualities, we can call that thing money. Now, back to our initial deviation, what is rare compared to scarcity? I'll tell you.

‘ Rare can be seen as something of value that is not a necessity so it's not in high demand. Scarcity on the other hand is something of value that is not abundantly available to meet its demand. ‘

Here’s the game-changer. What do you notice to be the difference between both definitions?

‘Demand’.

That's right. Now, can Demand be manipulated? Can a Country make something of value be in less demand compared to something with little or no value?

Hold that thought and let's get back to class, shall we?

The Transition From Barter System to Monetary System.

Barter Systems.

Barter systems were slowly going away with the advent of precious metals as a new form of money as they had useful qualities in themselves. Meaning, they could be traded in exchange for commodities, and the person who took them and gave out his item can go on to use that precious metal by melting it for other useful items for himself.

A clear example of this in history was the Romans’ use of bronze, while not among the most ancient examples, is well documented, and it illustrates the transition between the barter system and the monetary system.

First, the Ages rude (rough bronze) was used. This was a heavy weight of unmeasured bronze used in what was probably a barter system: the suitability of bronze for barter resulted solely from the alloy's usefulness in metalsmithing, and it was bartered with the intent of being turned into tools. However one striking thing at this time was, the bronze was not measured, so there was nothing new yet, simple old barter system going on, give me this and I give you this, both useful in themselves.

Then as the years went by, something else happened. The next historical step was bronze in bars that had a 5-pound pre-measured weight (presumably to make barter easier and fairer), called aes signatum (signed bronze). Since bronze was made from alloyed metals melted together with tin, it could now be measured and became a form of currency, now this currency was still useful in itself, however, the value could now be ascertained by weighing it. This was where the debate came as to whether this was still barter, or had become a monetary system. Trade was carried out using pre-measured bronze in some places.

This wasn't all, as time went by, we noticed something else happened again. There was a clear break from the use of bronze in barter into its indisputable use as money, because lighter measures of bronze not intended to be used as anything other than coinage for transactions was invented. It was now divisible and could be carried everywhere with ease as it was way lighter.

Monetary System.

Monetary system is a system by which a government provides money in a country's economy.

The coinage metals were now being minted into coins by governments as the new form of currency. The early coinage made from metal came into use during the Axial age(the moral revolution) in the Greek world, in Northern India, and in China, as coins became a widespread embodiment of money. Bronze, gold, silver and electrum (a naturally occurring pale yellow mixture of gold and silver that was further alloyed with silver and copper) were used. Silver coins from about 700 BC, are known from Aegina Island. Early electrum coins from Ephesus, Lydia date from about 650 BC. Ancient India in 6th century BC, was also one of the earliest issuers of coins in the world.This was now a common thing in those days, also called the commodity-money system.

One step away from commodity money is "commodity-backed money", also known as "representative money". You know the saying that goes ‘give an inch and they'll take a mile’ soon came into play without delay. Of course you would think this was a step in the right direction if you were present in those days. I mean, I'd be in support too, what brilliance! Many currencies of the world have consisted of bank-issued notes which have no inherent physical value but could be exchanged for a precious metal such as gold. (This was known as the gold standard). The issue is that our governments and their hunger for control is insatiable. Until they can control the very essence of who you are as a person, they can't take a break, and even then who knows what will happen.

So yeah, this happened, I mean the silver standard too happened, it then ended after that, the gold and silver standard happened after and so on…

Now that I've taken you through history, showing you how the barter systems gave way to the monetary systems, and however interesting that might have been, that’s not the turning point in history you want to hear, trust me. The real twist happened when the whole world was in search of gold. I mean it was scarce, a store of value and also generally accepted. So whoever owned more gold, automatically had more money. What do you think happened? Are you thinking of World War 1? That's a bit far-fetched I tell you, but you can't totally rebuff it out as the reason for World War 1 was the assassination of the Austrian Archduke Franz Ferdinand which then initiated a series of events to unfold, that led to the first war. Germany was mostly on the attack during the war, Britain was fully involved as well as France. The US tried so hard to be neutral only to join in at the latter stage that made the Germans sign an armistice to surrender. I’m sure you know a thing or two about the First World War now, however, the link that has with what we’re talking about has more to do with Imperialism( is when a country increases its power and wealth by bringing additional territories under their control. ) than the actual war itself. Before World War I, Africa and parts of Asia were points of contention among the European countries. This was especially true because of the raw materials these areas could provide. The increasing competition and desire for greater empires led to an increase in confrontation that helped push the world into WW I, as this was more like a power struggle than it was about the war.

Even this in all of its ‘wars’ wasn't really the turning point. It was after the war, something happened. Ever heard of the BRETTON WOOD SYSTEM of Monetary Management? Yes! That's right. That was what gave rise to the IMF as you know it today, as well as the World Bank Group.

Our next discussion would be on the rise and fall of the BRETTON WOOD SYSTEM of Monetary Management which then led to the biggest lie told in the history of Money, taking the paper currency off the Gold-Standard(commodity backed money ), After which we'll look at the confusion, deception and misconceptions of the Central Banks. Do you think the Central Banks print all the money? Think on that for a little, as what I have to share will surprise you.

Thank You for making it to this point. Hope you learned something new. As always, I'm your favorite Crypto journalist, Clever Abaribote. We’ll see in part 03 of the series, ‘MONEY AS AN AGENDA’.

Writer and Editor: Clever Abaribote

Sources : Wikipedia, history channel, in.gov, Google.