Money and Democracy: How the Elite Manipulated Ledgers and Created a Social Ranking System
Money is one of the most important but least understood manmade tools in existence. For more than 5,000 years humans have used a tool of exchange called money to facilitate trade. During this timespan, the evolution of money has evolved into a system of information, a social contract, and a ranking system.
Introducing the General Ledger
The evolution of money has a fascinating history and the birth of the Bitcoin network transformed societys concept of the subject into something altogether new. In its simplest form, money is simply information, sometimes coupled with physical items, that is traded for goods found or produced by humans. One of the earliest versions of money stems from ancient Mesopotamia (3,200 BC) when people used tablets to account for certain types of goods like grain, meal, and malt. The reason individuals developed an accounting system is because physical items could get too cumbersome to show wealth to others for credit. For instance, if you had six months worth of grain in storage, its easier to show someone from a distant village a ledger of the goods rather than transporting the grain itself. The first ledger entry systems created by the Mesopotamians were called pictographic tablets.
Ancient pictographic tablets or general ledger systems.Double Entry Bookkeeping, Fractional Reserve Banking, and Promissory Notes
The Mesopotamians were the first to introduce the concept of a general ledger, which summarized an individual or groups financial information in a log. Thousands of years later, the general ledger transformed into a different system called double-entry bookkeeping. The new method helped facilitate lending between merchants and the Jewish bankers in Old Cairo. Most people recognize the double-entry ledger system initiated in 1340 AD which is known as the Messari. While people still used physical items like coins, the double-entry bookkeeping (DEB) system often acted as the backbone for all the units of money used by the community of citizens. Rather than a simple general record, a DEB protocol required financiers to record a corresponding and opposite entry into two separate categories called debit and credit. The very foundations of the worlds banking system derive from the rankings of capital and debt. Just like silver and gold coins, the DEB system became an implicit agreement that members of society observed to further cooperation and trade. The ledger system and the most popular physical currencies and commodities at the time formed a social contract we call money and society still uses the same system today.
Double-entry bookkeeping became a standard after becoming extremely popular among bankers throughout Italy, England, and France.
After the DEB system was created, bankers learned how to manipulate the books. For instance, the third parties who were entrusted wi ...Read full story on Bitcoin News