What is the coin?

The coin has been for millennia that universal language of value that we all understand. It facilitates trade. It allows us to save what we earn 🌍. In short, it is any method of payment that people accept to exchange things, although it seems to always be changing form.

From Barter to the First Coins 🔄

Before we had bartering. Direct. Simple. I give you this, you give me that. It works well at first, but then everything gets complicated.

Think about this: you have a coat, your neighbor has apples. The first trade? Easy. And after that? You want more apples but she no longer needs another coat. You're stuck. This problem pushed us to look for something better.

Commodity coin: intrinsic value 🥇

Commodity coins are things that are already valuable in themselves. Throughout history, we have used everything. Tobacco in Virginia back in the 17th century. Shell beads among Native Americans.

Gold and silver? The champions of this category. They continue to be important today. No joke, in 2023 gold reached prices never seen before, over $2,400 per ounce. People still rush to them when everything falls apart 📈.

Proxy coin: the era of backing 📝

Loading gold is heavy. Very heavy. That's how certificates were born. "This paper says I have gold stored somewhere."

The gold standard dominated until not long ago. You could exchange your bills for real gold. It limited inflation, more or less. It made trade between countries easier.

Fiat currency: the current system 💵

Today we use fiat money. It is not backed by anything tangible. It is money because the government says it is. The dollar, the euro, the yen... all the same.

There is no natural scarcity. The Federal Reserve can create more whenever it wants. Practical for crises. Dangerous too.

Inflation in the United States was at 3.2% in October 2023. Better than the 9.1% in 2022, but still far from the 2% target 📊. Not ideal.

The rise of cryptocurrencies 🚀

Bitcoin appeared in 2009. Revolutionary. Digital. It combines the best of both worlds: scarcity like gold, but digital and transportable like a file.

There will only ever be 21 million bitcoins. Never more. Some call it "digital gold." Right now it is worth about $66,500, after breaking records in 2023 🌕. It's crazy, if you think about it.

There are many other cryptocurrencies now. Each one does something different, not just moving money.

The evolution continues 🔄

Money never stops changing. Those payment apps you use? The result of thousands of years of monetary evolution. Cryptocurrencies are just the most recent chapter.

Will they someday replace fiat money? Who knows. What seems clear is that our idea of money will continue to transform as we move forward 🌍✨. Everything flows.