From Barter To Bitcoin Revisited: The History of Credit and Money, Part 1 – Antiquity To Reformation

This post will revisit an old favourite of mine beginning with a brief re-telling of the original post From Barter To Bitcoin – The Theory of Credit and Money, and the journey from the most self sufficient and isolated barter economies to the modern globalist digital credit and payment processing technologies that connect, control and extort the global population, and to the future, of the overwhelming of the last five centuries of centralisation by the gathering forces of decentralisation and Distributed Ledger Technology, of blockchain technology, and of its most successful prodigy in Bitcoin, as the underpinning of a return to pure bi-lateralism in private contracts that is the essence of the Lightning Network, of a two way payment channel between parties that cuts out banker, accountant, lawyer, tax inspector, thief…

From Barter To Bitcoin – The Theory of Credit And Money

The essence of life on Earth is to exchange… We are as individuals born into a collective of blood kin, from whence our early exchanges mould our future perceptions, exchanges with family, community, market and state, voluntarily and unvoluntarily, will shape and define all our lives…

A part of this life will be economic exchange, or the exchange of goods, services and property…

The most scalable method of economic exchange is of course local (due to familiarity, trust and some kind of already developed infrastructure), and because of this closed loop ecosystem where everybody knows each other, this does not require money, it can be facilitated by credit and ledgers, such as futures contracts, or debit and credit ledgers and accounting “books”… As stated in many past posts barter can and has worked very well for large tracts of history, and does not require money or an universal medium of exchange per se, rather barter can be managed by credit substitutes and derivatives, and/or ledgers… 

The Origin of Money is about scaling exchange past those you know, and to those who you don’t know, but this requires an independent counter-party to mediate value between participants and this counter-party requires physical manifestation and some intrinsic characteristics, on the most basic scale visible in crude and local/regional commodity currencies, which have been shells, feathers, nails, tobacco, salt, paper script, and on the most developed scale in precious metals, or gold and silver coins and reserve currencies… Indeed the development from commodity currencies to gold and silver coins is the journey from local and regional isolation to national, international and intercontinental trade and money flows

Gold and silver have become the reserve currencies of history solely on the back of their superior characteristics in the three main functions of money, which are 1) a store of value, 2) a medium of exchange and 3) the unit of account, and that these characteristics consist of a scarcity and costliness of production (proof of work), that it be durable, and portable, and divisible and fungible, and so can spread over wide geographical areas and populations… As I have written in many posts, money is the birth of civilisation and centralisation, as a collective store of value is expertly fabricated and coined and distributed and expended in the construction of ports and cities, infrastructure and architecture, commerce, art, science, literature, and the advance of technology and technological discovery…

In a civilisation awash in money, there will rise a need for specific institutions to further distribute money and/or facilitate more streamlined exchange, or shorter still, the Origin of Banking… From the goldsmiths and the masters of coin and currency, comes a second layer solution and the industry of interest, by building storage vaults for precious metals and to attract deposits either for safe storage or at risk in exchange for an interest rate, while also lending out deposits to borrowers at a higher interest rate… This system of deposits and loans is facilitated from the Renaissance and Reformation via the Double-Entry Book-keeping Ledger and/or a derivative system of leather or paper scrip or currencies, a paper currency leveraged on top of precious metals as a more convenient and easier sub-division for medium of exchange and unit of account purposes… Banking should therefore be initially understood as a credit derivative layer that by also attracting deposits and extending loans, and in theory the spread between the lending rate and the deposit rate would make banks and banking a productive industry to benefit trade and civilisation… Alas…

If banking were ever profitable through capturing the interest rate spreads between savers and borrowers, then I don’t believe the practice of fractional reserve banking and economics that has plagued the last five centuries would have originated, rather I believe that the inherent unprofitability and organic scalability of banking over gold and silver coins led to the rise of fractional reserve banking, and the business cycles of boom and bust… Because the paper currencies issued by bankers over time are based upon the built up trust by exchanging populations, they become to a certain extent inter-changeable with the gold and silver coins themselves, thus the banker can start issuing currency at virtually zero cost over the costly produced monies in his bank vaults, creating a speculative boom in investment and the enriching of the banker while impoverishing the rest of the populace through rising prices, also known to history as speculative manias… This state of affairs was temporary and following every boom there was a bust, when trust in derivative paper currencies vanished as the value of hoarding the underlying precious metals became paramount, leading to a run on the bank, the draining of reserves and the eventual bankruptcy of banker, his social status, his enrichment racket, and in many cases, his life… Fractional reserve banking is a dangerous practice for bankers without an escape mechanism, or otherwise stated a lender of last resort to backstop and eventually legalise their crimes

Central banking is a system designed as a lender of last resort for commercial banks, and because of the need for monarchs in financing wars and conquest, these commercial banks sought to establish a central bank, a quasi-nationalised entity backed by law and legislation, and enforced by the state with the power over legal tender, and the literal licence to print money… While gold and silver are still held as reserves by central bank, they increasingly leverage their own paper and later digital currencies as base money, onto which the commercial banks continue their fractional reserve banking and when boom comes to bust, now know they will be will be further protected by the central bank which unleashes moral hazard and the business cycle is nationalised, and a nationalised pillage of the people by their banking overlords, and when it is only a question of time until precious metals are demonetised, and national economies and reserve currencies become unhinged from any kind of scarcity…

The severing of the link to gold weaponizes not only fractional reserve banking and business cycle boom and busts within nations, it also explodes trade deficits for currency exporting nations and trade surpluses for goods producing nations, and creates national instability on a global scale, otherwise known as Globalism which is the system we have lived under since 1971, but the question is now being asked by more and more people, that if the central banks were able to bailout the world financial system in the last devastating crisis, then who will bailout the central banks that have taken on such ridonculous amounts of debt on their own balance sheets, in the next crisis? The point I’m trying to make is that a credit system based on central banking and financial centralisation is finite and has a terminality, this five century old fraud has managed to kick the can down the road, and to bailout, consolidate and centralise their ownership over currency and therefore their increasing ownership of the economy, from the fabrication of capitalism and the industrial revolution, to communism and nationalisation of industry and agriculture, and like the Soviet Union the West and their three reserve currencies of The Federal Reserve Note (The “Dollar”), The Euro and the British Pound, collectivism and nationalisation of currency and debt will end in the bankruptcy of national debt, in jubilee, in debt write offs, and in the writing off of banks and their worthless ledgers

From the birth of the internet in the early Nineteen Nineties (and even before) there had been a libertarian movement of engineers and programmers working toward developing a decentralised and independent electronic currency that could work outside of governments and the banks, and went through numerous iterations and failures principally because of centralisation and the inherent need for a centralised counter-party and therefore fragile and subject to censure, arrest and shutdowns, which neutralised any competition and allowed fiat currencies to continue to dominate…

By picking and choosing the best bits of previous e-cash projects and adding his own improvements, in the late 2000’s a shadowy programmer called Satoshi Nakamoto released the latest version of electronic cash, however this time without any central issuer of currency or any centralised counter-party, an astounding technological feat and advance in law and accounting… Bitcoin has been designed as a decentralised, open source ledger, whom anyone can download and each party or peer downloads exactly the same ledger, thus making it peer to peer and censorship resistant… The currency issue is strictly controlled by algorithms with a stable issue rate and with a maximum currency cap of 21 million, and is issued by the miners who are rewarded based on the resources and the hardware they contribute in powering and securing the Bitcoin blockchain… This maintenance of Bitcoin’s accounting ledger and the distribution of currency by a decentralised (although concentrated) pool of mining power does away with the concept of banking and a middleman, so while the ledger itself is a triple entry bookkeeping ledger, it pushes the risk and innovation to the periphery of the network, where anyone can create and develop applications for the secure storage, and transfer of this fledgling internet native currency…

Credit And Money – Definitions

Before digging further into the history of credit and money, I think it would be prudent to first define terms, what they have in common and where they differentiate, and why…

Credit – Definition

I will define credit as anything that is tied directly to a ledger, that is a central repository of accounting records for any and all human contracts of exchange… These ledgers have taken many forms throughout history, from stone and clay tablets, to large and immovable stones, to notched or inscribed wooden sticks, to leather and paper books, to the modern world of digital protocols and databases accessible through the internet, computers, and smartphones… Most economic historians you find are only interested in monetary history and in civilisational empires, while ignoring or disregarding these large tracts of history that “went dark” and “dark ages” when ledgers and credit and not money were the rule… This method of exchange is usually localised and bilateral and cannot scale much further before the need to evolve commodity currencies and eventually money, and as a rule there is no physical medium of exchange present, although a physical derivative may be manifested (a paper banknote for example)…

Money – Definition

I will define money as anything that does not rely on a ledger for its derivation of value, it is a physical medium of exchange that does not have counter-party risk (in the conventional sense), has been costly produced or has intrinsic scarcity and has the trust of an exchanging population at whatever scale… As I have described isolated economies have scaled nails, shells, feathers, tobacco, salt as commodity currencies, but currencies and money are two different things… While precious metals have heralded the monetary ages of history, the term precious metals oversimplifies what is at the end of the day just another currency, over and above the extraction of precious metals as a commodity currency, it is the refining and coining of precious metals that have actually taken us to monetary ages, and why in my opinion that gold and silver smiths (call them the secret sauce of civilisation) as the creators and destroyers of reserve currencies become cognate in my mind with book-keepers and accountants, the counter-party risk of money has always been its purity or its debasement, which is why in this post I will be discussing money in the context of history’s many reserve currencies…

The History Of Credit And Money – Graphic

A historical dot connector for tribes and ethnicities, religion, history, myth…

Dylan Monroe

History of the Masters Of Money – graphic courtesy of Dylan Louis Monroe

Pre-History – The Origin Of Credit

The most scalable form of voluntary exchange is localised barter where there is familiarity and trust between exchanging parties, this is not really a world that requires money, but rather exchange that can be managed by ledgers, which include the most primitive examples of accounting in known world history, from inscribed stone or clay tablets, wooden boards and notched tally sticks, to a myriad other methods, remembered and long forgotten… While most if not all Austrian economists will explain to you the double co-incidence of wants inherent in physical face to face barter (Direct Exchange) will near instantaneously bring about the Origin of Money and Indirect Exchange by the way of a medium of exchange, the problem I have with this theory is how literally Austrians stick to this simplistic theory, as if humans could not invent a system to by-pass the limitations of physical barter with metaphysical barter, or as I have called it, mental barter… The essence of ledger technology and the most primitive examples of barter exchange do have physical manifestation, but the medium of exchange and unit of account happens in the mind, by setting up a method of counting (accounting) and a debit and credit system, whereby giving away produce results in a debit on the ledger, and receiving produce results in a credit on the ledger… As long as all parties trust each other and the proper accounting of the ledger, then this system can scale exchange without the need for a physical medium of exchange, while there are numerous examples of derivatives of ledgers circulating as physical mediums of exchange (most often paper script and/or banknotes)… The ledgers however are not circulated and is the critical distinction I will pitch in this post, that a credit system does not require a physical medium of exchange, because the ledger alone is trusted enough to suffice

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An excellent example of what is a communal ledger (and not money) are the Rai Stones from Micronesia, isolated from the history of monetary developments, and this particular culture’s method of scaling exchange and community… A large stone ledger allows for the oral exchange of property (mental barter)…

Sumeria (4500 BC – 1900 BC)

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According to the latest historical and archaeological “discoveries”, the oldest records of civilisation, of a division of labour and written language/records is Sumeria, in Mesopotamia (the modern Middle East), developing farming, urban settlements and the development of accounting ledgers, and invented writing, the wheel, law codes and literature (most famously the Epic of Gilgamesh), mathematics, calendars, beer, and much much more

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Cuneiform writing allowed for the development of ledger technology, and the birth of accounting, written with reeds on wet clay tablets which then dried and hardened in the sun, to form a long lasting physical contract…

The use of ledgers, commodities, precious metals, loans and debt, and periodic Debt Jubilees (writing off debts and ledgers) also give us some insight into the complexity of this very early civilisation…

Tweets courtesy of @surimana16 on 24th Century BC Sumeria

Beautiful tweets by @janeygak concerning the developments of laws and financial planning in Sumerian culture up to around 2000 BC…

Egypt (3100 BC – 650 BC)

The second oldest civilisation out of the middle east is Ancient Egypt, who like Sumeria would develop an independent writing system that would underpin its centralisation and ascent to regional power, including a military, a religious bureaucracy, kings and their astonishing pyramids, and the collective exploitation of the fertile Nile deltas in producing and exporting surplus crops with surrounding regions…

Again like Sumeria, this early civilisation scales without the use of money, but through writing and ledgers and mental barter, credit…

Egyptian “Money“: the Egyptians valued their weights metaphysically rather than physically, indeed the circulation of coins in Egypt only begins around 500 BC, and only after being conquered by the Persian Empire which brought the Daric with them…

Babylon (1900 BC – 500 BC)

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It is thought that the failing fertility of agriculture in Sumer contributed to an exodus of population and wealth into what would eventually become Babylon, an Akkadian Kingdom of Mesopotamia… And it would be expected that the financial knowledge and language written down on the clay ledgers of the last twenty six centuries of Sumeria would compound during the next fourteen centuries of Babylonia, both in the division of labour and complexity… The culture and governance system of Babylon would give us ancient gods Marduk and Ishtar, would produce rulers from Hammurabi (1810-1750 BC) to Nebuchadnezzar II (642-562 BC), and would construct the The Hanging Gardens and the Tower of Babel that is the origin myth of the division of languages in the Bible…

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Babylon begins to thrive as the Code of Hammurabi and a lenient view over debt repudiation maintains a distribution of independence and property, and avoiding the concentrations of power and dependence in the build up of debt…

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The last hurrah of Babylon was the Neo-Babylonian Empire which spanned from the Persian Gulf, to the Red Sea and the Mediterranean in the last hundred years before its demise…

Phoenicia (1500 BC – 300 BC)

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Phoenicia is the fourth and most under-talked civilisation of the pre-monetary age, hailing from what is modern Lebanon, in fact it is the Phoenicians I believe that provide the transitionary civilisation between the Credit Age and the Monetary Age, and due to their rich deposits in copper and their red cedar trees that made for the best ship materials to run trade routes throughout the Mediterranean and North Africa, would require a leap forward in technology from ledgers and localised trade toward money and a physical medium of exchange to scale differing and disparate trade partners

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From the sparse details I can glean from the internetz the Phoenicians are claimed as the inventors of money, specifically copper as money to facilitate trade on such an expansive scale…

Mind bending tweet thread on much more than just Phoenician history, courtesy of @1FreeInhabitant

It is from Phoenicia that we get the contributions of Solomon’s Temple, Jezebel, the establishment of the mighty Carthage as a North African trade colony, and the Phoenician Alphabet originally spread by its merchants, that would be adopted and altered by other cultures, to become one of the most widely used writing systems…


The development of these four main pre-monetary civilisations would take place during the age of copper (the Bronze Age 3200 – 1200 BC), and for the last three up to the end of the Iron Age (1200 – 550 BC), but Ancient Egypt, Babylon and Phoenicia would fall from 500 BC onward, as further technological developments in metal working leads us to the Monetary Age that would last the next thousand years, spanning Persian, Athenian, Macedonian and Roman Empires…

The Monetary Age (500 BC – 500 AD)

As I’ve described, it was the Phoenicians that evolved a medium of exchange to facilitate their maritime trade empire, and this is what I consider the main difference between credit and money… While ledgers can scale a store of value and unit of account by a fixed ledger captured in stone, clay or paper, it doesn’t scale as a portable, divisible and fungible medium of exchange independent of the ledger itself, and which can be circulated independently of any ledger or credit system… Indeed, one of the benefits of scaling a sovereign medium of exchange is to remove debt and futures contracts out of the equation, by that I mean it is possible to settle any debts in real time by exchanging money, which as we’ll find vastly increases the centralisation power of monetary civilisations over credit civilisations, and also speeds up the turnover of the rise and fall of monetary civilisations

Persian Daric (550 BC – 330 BC)

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From 550 BC and the reign of Cyrus The Great (550-530 BC), Persia unified, then in 546 BC conquered Lydia (and famed King Croesus, another inventor of money), in fact the Persians adopted money directly following the conquering of Lydia and discovery of Croesus’ invention, and from when the Daric was issued… In 539 BC Babylon was conquered bringing to an end their centuries of domination, and in the same year the historic Phoenician civilisation was also conquered (with the Phoenicians becoming the effective Persian Navy in the forthcoming Greco-Persian Wars 499-449 BC), in a period of eleven years the Persian Empire would absorb five millennia of cultural and legal history… At its height in 480 BC the Persian Archaemenid Empire comprised of 50 million people, nearly half of the world’s estimated population at that time, which is the highest figure for any Empire in history…

The success of The Persian Daric, as the first major scaling up of gold and silver coinage gave the Persian Empire such an advantage in the scaling of society, of scaling an official language (Aramaic), roads and a postal service, of armies and navies, civil service, government and taxes, indeed the Empires following Persia would adopt many of its pioneering concepts in centralisation and conquestThe Age of Empires and The Age of Money go hand in hand

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The Persian Daric gold coin and the Siglos silver coin (20 silver coins equivalent to 1 gold coin), formed the bimetallic standard of the Persian Empire… The Daric introduced under the reign of Darius The Great (522-486 BC) would have a purity of 95.83%

Greek (Athenian) Tetradrachm (510 BC – 87 BC)

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The Delian League otherwise called the Athenian Empire rose as a collection of warring Greek States who consolidated against a common enemy, the remarkably aggressive and innovative Persian Empire who had conquered the Middle East and Asia, and looked to expand into Eastern Europe and the Mediterranean… The rich history of Ancient Greek literature comes down to us today as one of the founding pillars of Western Civilisation, and is enshrined in myth and culture… From the Battle of Thermopylae where 300 Spartans (and others) slowed up the Persian Army advance in a heroic and suicidal last stand, to the naval Battle of Salamis (480 BC) where Themistocles and his navy defeated the navies of Xerxes The Great, are remembered in the West as the defence of freedom against tyranny

But as the external threat of Persia waned during the Fifth Century, so did the threat of further internecine warring increase, with Athens abusing its privilege as the commander of the Delian League, increasing domestic tensions eventually led to the Epic of Classical Greece, the Peloponnesian War (431-404 BC), between Spartan Oligarchy and Athenian Oligarchy Democracy, which spelled the end for Athenian supremacy in Ancient Greece

What the twenty seven year civil war that divided and weakened Greece would lead to, was its conquering and absorbtion into a new Empire, not from Persia and the East, but from Macedonia in the North, that would extend to the silver Tetradrachm itself

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Athens held silver mines in state ownership and the expertise in minting coinage that meant that even states unfriendly to Athens were willing to transact it…

Macedonian Stater (350 BC – 250 BC)

Babylon bankers

Excerpt from The Secrets Known Only To The Inner ElitesLyndon LaRouche


The scale of Macedonia in 336 BC at the time of the assassination of Philip II of Macedon, and the accession of his son Alexander The Great, to the throne…

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Macedonia had traditionally been a small kingdom dominated by Athens, Sparta and Thebes, but under Alexander would flip all the tables and conquer most of the known world between 336 BC and his dubious death in Babylon in 323 BC, Macedonia may have been a very short lived Empire and Hegemon that barely lasted past Alexander’s death before being cannibalised by descendant infighting, however this should not detract from the astounding military and strategic genius of what has to be the Greatest Commander and General of armies in human history


Alexander the Great in the thirteen years that he reigned, conquered the whole of Greece, Egypt, Asia Minor, the mighty Persian Empire, he even got as far as Asia, of modern Afghanistan, Pakistan and the edges of India and China… Truly the Greatest

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The Macedonian gold and silver Stater, along with the conquest of Athens and capture of its Tetrodrachm and silver mines were used to scale the short lived and vast Macedonian Empire of Alexander’s… When Persia was conquered for example, the Persian Daric effectively came to an end as a coin as they were all melted down and re-coined as Staters

The death of Alexander would bring to an end the golden age of Greek Power, as history entered what is known as Hellenistic Greece, as the vast Empire Alexander had built was slowly diluted and lost through wars and revolts… Macedon would lose most of Greece, and their alliances with Carthage would entrench them into wars with a new fledgling Hegemon, that would come to subsume all of Greece, and would shift Civilisation and Empire westwards in the Mediterranean, and into Western Europe, emanating from Rome


Roman Denarius (211 BC – 250 AD)

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The currency to fuel the greatness of Rome which lasted nearly five centuries and probably the longest lasting reserve currency in history, was the Roman Denarius… Rome was at war both with Carthage and by extension their alliance partners in Macedonia in what is called the Punic (Phoenicia) Wars, which lasted an insane 118 years, included the legendary Hannibal leading elephants over the alps, of Scipio Africanus, of epic naval battles and the eventual triumph of Rome, destroying Carthage and a nine hundred year old maritime civilisation, and sewed the land with salt so that nothing could ever grow there again… Brutal

The Roman Denarius was introduced during the Second Punic War from 211 BC and adopted from Greece as it was conquered, and with the smackdown of the remnants of the Macedonian Empire (and the Stater) and Carthage (the Shekel), Rome became the dominant land and naval power and issued the reserve currency that would last the next four and a half centuries

Peak Rome – The End of the Republic


The early history of the success and growth of Rome had been as a Republic, but with reserve currency status and centralised control of the issue of what was at the time a world reserve currency, it was inevitable really that Rome would morph into an Empire, and rule by Emperors… It was Julius Caesar that lended most to the weakening of the Republic by Crossing The Rubicon to became a lifetime dictator (Caesar), which lead to his assassination in 44 BC, and The Roman Empire was finally consolidated by Rome’s first Emperor, Octavian, known as Emperor Augustus in 27 BC, having conquered both Greece and Egypt… The high point of Rome’s domination over three continents, would only be a century away

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The extent of Rome during the life of Jesus Christ, and at 117 AD

Descent Of The Denarius – A Study In Debasement

The scale and the longevity and the remaining archeological evidence of the incomparable rise and fall of Rome, allows the track and trace of the rise and fall of Rome in the purity of its money, the silver content of the Denarius…


The Antoninius was introduced from 215 AD alongside the old Denarius, but likewise was subjected to serial debasement and by 300 AD, was almost exclusively made of copper…

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From 300 AD and without a functioning currency, Rome limps on for another near two centuries… After persecuting the Christians for the last three centuries, Christianity will eventually subsume Rome with the Christianisation of the Empire from the Council of Nicaea in 325 AD onward by Constantine, and a legacy that would last far longer in Western Civilisation even than Rome itself… Despite this, the Empire was devoid of any social solidarity, and with soaring inequality between its ruling oligarchy in Rome and the rest of the subjects of the Empire, it became the Bread and Circuses warfare and welfare state, with an exodus of the productive out of the increasing taxation and pillage that had become Rome, and the importing of foreigners and slaves to try and perpetuate the Status Quo

Excerpts from Eileen Edna Power’s Medieval People

Reading those excerpts should be bittersweet to any Western reader, because this should chime with what the West is being subjected to today, stagnating or diminishing native populations due to currency debasement, and mass immigration as the cheap labour alternative to fill the void… In our material comfort, it is becoming inevitable that we will soon repeat the collapse of the Roman Empire, at the end of a century supercycle of central banking currency debasement… Will we never learn?

Rome timelapse 500 BC – 500 AD

Some Further Reflection On The Monetary Age

What I believe we see in the history of credit that distinguished Sumeria, Babylon, Egypt and Phoenicia was some kind of law codes that created the localised network of credit ledgers, which maintained decentralisation for far longer stretches of history than we would see during the monetary age… As local ledgers are far harder, if not impossible to fabricate, dilute and debase, the wealth inequality and oligarchy cannot destabilise society to anywhere the same effectiveness as during a monetary age… When coins are struck and copper, silver and gold coins circulate independent of any credit ledgers, then it should become clear that money becomes more than a pure instrument, it becomes a law unto itself… The issue of money and legal tender laws go hand in hand, and it arises by Kings or States, indeed I think what we can glean from what I have described so far, is money is the effective birth of the centralised state, from Croesus, to Cyrus, to Athens, to Alexander, and the Denarius of the Roman Republic, and Empire… And money weaponizes the possibility of debasement in a way impossible with barter credit ledgers, law moves from common to issuer, and as money becomes THE LAW, then debasement of money lawfully creates the wealth disparities that entrench both oligarchy and serfdom, and destabilises societies in far more destructive waves than barter credit ledgers ever could… That the turnover of Empires increases rapidly following the invention of money should not be a surprise, as mere usurpation of coining money is enough to cripple any rival, I think what should be observed is that money centralises power, wealth, warfare, and welfare, and ultimately makes civilisations far larger but more fragile than what was observed by the millennia long and far more decentralised and longer lasting civilisations of pre-monetary history… If this rather positive assessment of the history of credit and the more negative assessment of the history of money leaves you suspecting that I think the invention of money was a step backward in human collective evolution, you might very well be right

The Fall of Rome – The First Split In Christianity

The Western Roman Empire officially falls in 476 AD sacked by Germanic tribes and the Huns of Attila, and brings to an end a seven century civilisation in the West, the Empire lived on in the East and its capital in Constantinople (Istanbul) also known as The Byzantine Empire, and lasted until 1453 when it was subsumed by The Ottoman Turks


Byzantine Empire at 1025 AD

This split in the modern Christian Empire also reflected the split in the Empires from 500 AD onward, while Western Christianity evolved in Latin, Eastern Christianity evolved in Greek, and it would become clear that Christianity was headed for its first major schism between West and East, that would culminate in 1054 AD with Roman Catholicism and Eastern Orthodox Christianity

The currency of the Byzantine Empire was the gold Solidus, and lasted until abolished by Alexius I in 1092…

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The Solidus lasted from 325 AD to 1092 AD serving parts of Western Europe, Eastern Europe, and the Middle East, and at nearly 800 years the longest lasting reserve currency in history…

Western Europe From 500 AD – Credit And Money

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The Descent Into The “Dark Ages”

While Rome was sunk by Germanic and Eastern barbarians, these barbarians would eventually Christianise and settle, and which precipitated the fundamental rebuilding of the European continent following the warfare and taxation of Empire… And this was an Age of credit more than money, as it would take another seven hundred years and the late medieval period before we saw reserve currencies approach anything like the scale of the Denarius

The Early Medieval Standard – Currency Reform

While Western Europe initially continued to transact in silver Denarii and gold Byzantine Solidus, it was the first king of the Frankish (French) Carolingians, in Peppin The Short (father of Charlemagne) who developed a monetary standard that would extinguish the last remnants of Roman coinage with the introduction in 755 AD of the silver based pound, shilling and pence system, which spread throughout Western Europe, and a standard adopted by individual mints and city states and countries to differing standards and purities


The Pounds, Shillings And Pence system lasted in the UK until the crime of decimalisation in 1971… A monetary system for a simpler age, and when a pound actually bought you something… Twenty shillings to a pound, twelve pence to every shilling, 240 pence in the pound… A pound of silver at melt value today by the way is around £ 240.00, divide that by 240 and you will find a penny then is worth a pound now…

Medieval Law – Return To Credit Ledgers

Even though the Catholic Church held as religious and legal authority over Western Europe, I cannot stress enough how they had no real controls over currency other than taxes, they did not issue the reserve currency as Rome had, and therefore the narrative that the Church was just an extension of the Roman Empire in my opinion is plain delusional… While the Church and Christianity did allow the development of Law, in Canon Law, Natural Law and Common Law, French, German, Spanish, English and Celtic kings developed their own regional and national laws and customs to arrange social order and to allow exchange of property and trade… Indeed due to chronic shortages of gold and silver coins, the early medieval period to a large extent went back to the pre-monetary ages of history, through the further development of ledger technology, this time through notching sticks of wood

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Far from the complexity of Cuneiform writing on clay tablets, the largely illiterate Europeans developed a far simpler method of recording production (debit) and consumption (credit), by notching sticks as the accounting method, with each notch corresponding to a measure of grain or silver or labour… However the question does arise over the keepers of these tally sticks, as a singular counter-party does expose this ledger technology to fraud and corruption, and so those arcane and stupid Dark Age peasants evolved the most brilliant and fraud proof ledger in history, the first and most basic iteration of what Satoshi Nakamoto invented in 2009, and Distributed Ledger Technology

Split Tally Stick – Distributing Credit Risk

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The Split Tally Ledger consisted of the Stock and The Foil, the Stock was kept by the issuer, the Foil was given as a receipt to the other party… This gave both parties irrefutable evidence of the contract, and any desire to counterfeit additional notches would show up when the ledger was re-assembled… And as this bi-lateral legal contract was accepted in Medieval Law Courts, this gave both parties security which contributed to the maintenance of decentralisation more than anything else…

As I will be discussing later I consider this to be beyond the decentralisation that even Bitcoin affords us today, as this was a bilateral contract independent of any other third party, even when we use Bitcoin today our transactions (or contracts) are publicly visible to anyone else on the global blockchain, so in fact it is the Lightning Network that is a far more accurate reflection of the medieval split tally stick, by leveraging Bitcoin the Lightning Network makes possible a pure bilateral transaction and the purest form of barter that we have had in many centuries

The Holy Roman Empire – The New Rival To The Church

The Holy Roman Empire, as its title implies, was the attempted return to the glory of the Western Roman Empire, although Franco-Germanic in nature and from the North, again we come across the Carolingian Dynasty bloodline, and the eldest son of Peppin The Short, the famed Charlemagne, crowned the First Holy Roman Emperor in 800 AD by Pope Leo IIIThis alliance come rivalry between German Emperors and Roman (Italian) Papal States would become a major European power of the next six centuries, but in a far looser and decentralised manner than the original Roman Empire… As the Catholic Church had authority but no effective centralised legal power over the issue of credit and thus control, neither did the Holy Roman Empire control in any meaningful way the issue of currency and power within its Empire, rather it evolved into a decentralised limited elective monarchy composed of hundreds of sub-units in kingdoms, principalities, duchies, counties, etc…

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Indeed nothing encapsulates the decentralisation of the Holy Roman Empire like its reserve currencies, of which there are 18 listed on Wikipedia… If anyone tells you that the Catholic Church or the Holy Roman Empire had anywhere close to the centralised power of the Roman Denarius, they do not yet understand the economics of the issue of credit and money… In fact the Holy Roman Empire is a microcosm of the whole European continent from 500 AD to 1500 AD, that of a decentralised and largely peaceful society because of the dominance of localised credit systems and ledgers over centralised monetary issue of continental hegemons… It would take the development of new monetary units and reserve currencies to disrupt the Feudal Order, and catapult us towards the European Renaissance and the Reformation

Knights Templar – Prototypical Bankers

As the East had encroached into the West with the invention of the Persian Daric, and as West had largely conquered East during the tenure of Macedonian Stater and Roman Denarius, the Dark Ages in Europe and the decentralised nature of a social order where credit had supremacy over money, then it should be expected that the only encroachment would come from the East into the West, if they operated a monetary system… With the emergence of the Islamic religion in 632 AD and the emergence of the Silver Dirham and the Gold Dinar (Denarius) from 700 AD onward, the spread of Islam and of money were intertwined, and fuelled an all out assault on Western Europe for the next four hundred years


The largely credit based economy of the European Continent and the monetary based economy of the Islamic Continent put Europe at a distinct disadvantage as the above graphic illustrates, it took until 1100 AD for the Christian West to collectively retaliate, and it would take a shadowy organisation using what boils down to military encryption in the use of centralised ledger technology to facilitate what would become known as the Crusades


The Knights Templar were a Catholic Military Order that facilitated the journeys of both Christian pilgrims and warriors to the Holy Land, and were established in 1119 following the First Crusade, the critical infrastructure the Knights bought the Western powers is why they became so powerful and wealthy, due to financial invention and ingenuity… The Knights were the inventors of the concept of a Trust, a transference of value through credit, and the invention of an encryption method so that this value could travel continents… For example, were a knight to go out to fight he could sign his estate and net worth to be held in trust by the Knights, while the knight could then finance his journey to and from the crusades via the letters of credit issued by the Knights Templar, and likewise pilgrims travelling to visit Jerusalem could deposit collateral (most likely precious metals) with the Templars for the same letters of credit that would finance their journey…

Encrypted ledger technology is worthless to enemies, but priceless to allies… As only the Knights could decode their credit notes, and by building a series of shelters and banks on the roads that led from West to East, these credit notes could be converted into hotels and beds, food and beer, money to spend… This is the effective invention of a continental banking system and this happened nine hundred years ago, in what modern historians and economists tell you is the depth of the “dark ages”, lol!

This remarkable infrastructure network and credit system made the Knights Templar among the most powerful and wealthy in Europe, and would eventually also seal their fate as their power threatened rivals… As bankers the Knights also lent out money to be charged at interest, including to kings and powers of law and persecution even more powerful than bankers in those days… From 1250 onward, the Knights began feuds with other Christian orders, and lost effectiveness in defending the Holy Lands from the Islamicists, and it was a King heavily indebted to the Knights that would take them down and drive the remnants underground, on Friday 13th October 1307 King Philip IV of France arrested, tortured, and burned at the stake many of the Templar order


Guelphs And Ghibellines – Precursor to The Italian Renaissance

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As the Templars faded from Medieval power so did the power shift within Europe from Germany toward Italy, and from the Holy Roman Empire toward the Papacy… This struggle for control coalesced around two camps The Guelphs and The Ghibellines… It was a split between predominantly landowners (Ghibellines) and merchants (Guelphs) and would be most famously described in perhaps the crowning work of Medieval European Literature, in Dante Alighieri‘s Divine Comedy


The Sixth Circle of Hell (Inferno) – Heretics

The War between Guelphs and Ghibellines was essentially a war between the landowners, and the merchants… Landowners derived their power and wealth from the land and its working (feudalism) and conservers of the status quo and the immovable, while the merchants derived their power and wealth from goods and exchange, thus pioneering and profiting from the movable… And the Florin and the Ducat as reserve currencies would tilt the balance of power, for the first time in really a millennium, from Landowner toward Merchant, from land to sea, from common law to maritime law

Florentine Florin (1252-1533 AD)

The Renaissance is generally credited as beginning in Florence, and usually attributed to its political structures, and particularly the patronage of the Medici Family, as one of the most powerful banking dynasties of the late middle ages, and credited as among the earliest progenitors of double-entry book-keeping, a new accounting technology that swept throughout Europe from the 15th Century onward, which is also called the Origin of Banking… The powers of new financial technology would afford the House of Medici through the Bank of Medici (1397-1494) tremendous influence in flows of money into Florence for near on a century, including trade and commerce, wars and politics, and culture and art…

Niccolo Machiavelli would serve as as a secretary in the Florentine Republic during the time the Medici’s were out of power, and would publish one of history’s most celebrated political treatises, The Prince in 1513…

Venetian Ducat and Sequin (1284-1797 AD)

I will begin Venice ascent to medieval power with Marco Polo (1254-1324), the Venetian merchant, explorer and writer who travelled through Asia via the Silk Road between 1271 and 1295, and who really described to Europeans for the first time what lay in the East, and his travel books would inspire minds like Christopher Columbus and other merchants during the Age of European Empires that will form Part 2 of this post… Polo would also meet with the grandson of the mighty and feared Genghis Khan of the Mongol Empire, Kublai Khan (1215-1294), and would serve as Khan’s foreign emissary in the East for 25 years…

I find it remarkable that Venice gets so little historical coverage when it comes to late Medieval history, as they would serve as the prototype (and one could argue merely infiltrated the future Age of Empire in Europe from 1500 onward)…

Guess what else Marco Polo brought back with him from the East?! Further epic tweet threads on Venice and money and credit, and much more here.

With connections to both the Mongolian Empire and the Byzantine Empire in the East, Venice would trade in goods, spices, and slaves by the high seas on an inter-continental scale…

The Merchants of Venice would come under increasing pressure from a coalition of powerful enemies, and by the Sixteenth Century would need new European colonies to distribute their inter-generational power base and risk, thus the Venetian Empire would be exported via the Protestant Reformation to the major European powers I will discussing at length in Part 2…

The power of the Sea and of Maritime Law… Amsterdam, Antwerp, London, New York, Hong Kong, Singapore, Bombay became major trade centres due to rivers, harbours and the Seas…

Protestantism was a cunning method in undermining faith in the Church and especially its strict laws against lending and usury, that could be exploited by money lenders to finance protesting kings and allow them to nationalise kingdoms, enshrine nationalist constitutions and parliaments, and thus the slow motion wealth transfer of the people to these financial elites and powers… You cannot separate Banking and later Central Banking from Protestantism in Western Europe…

Protestantism would capture Holland and England first, and it’s no co-incidence that both would become global maritime Empires…

The Society of Jesus, another “Catholic” Military Order to reverse the Reformation, or just controlled opposition in the expansion of the Reformation? Another mind blowing thread from @1FreeInhabitant covering the Venetians and the establishment of America: An Alternate History of the United States of America. A gem in the Crown. The Thread Reader App version is here.

1500 AD – New Epochs

Here endeth Part 1 of this post, at the convergence of trends that congregate from around 1500 AD, one whole millennium since the fall of Rome, is the dismantling of land economics, feudalism and localism, and the emergence of maritime economics, nationalism and empire… And this epochal shift is centred around the accelerating adoption of technology and scientific discovery, that is fuelled by the catastrophic schism within Christianity and the emergence of the Protestant religion and societal divisions that the last millennium had largely escaped… The convergence of the following technologies; double-entry book-keeping, the Gutenberg printing press, and gunpowder powered weaponry, both sought to undermine the historic monopoly of the Church in fuelling division through protestantism, and the emboldening of monarch and state against the Church… To put it as simplistically as possible (while highlighting my feudal bias) from 1500 we see the convergence of credit creation, war and the printing of propaganda, that will define the next five centuries as the centralisation of the European Continent and the road back to the Roman Empire of old…

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