The instruments of trade and finance, like paper money, are groundbreaking inventions, put to use by collective acceptance using authority and seals of trust.

Paper Money

“Money is not the value for which goods are exchanged, but the value by which they are exchanged.”

The King Williams Administration used to borrow large sums of money used for wars and then levied taxes on ship cargo and spirits to pay back the interest. This gave rise to Banks like the Bank of England, and finally Bank Notes, the currency still used today.

The Invention of Paper Money

The financial system in use today is a version of John Law’s system:Each country in the developed world has a central bank that issues paper money, manages the supply of credit in the interest of commerce, uses fractional-reserve banking, and has joint-stock companies that pay dividends.

The John Law Economic System

The financial crisis of 2008 showed that the system can buckle anytime and money may not always be worth the same.As we get hyper-connected, the state-backed authority of currency, and what Money is really worth, is being rethought. Society has historically tried to invent new forms of currency, most recent being Bitcoin, a cryptocurrency.

Money's Worth

Paper Money was pushed as a 'fiat' currency due to an attractive quality: it was guaranteed to trade by the state authority for a specific weight of gold or silver, and couldn't be melted down or devalued.

The Rise of Paper Money

<ul><li>Real money is only gold, and all the other forms of currency in the system are merely different kinds of credit. </li><li>Credit is an indispensable part of a functioning economy, so it continues to thrive even with historical setbacks.</li><li>Gold is the only real 'legal tender'.</li></ul>

Gold

The idea of Facebook's Libra, an attempt to create a new currency made from the architecture that powers Bitcoin, is that the value of new money is not derived from state authority, but a combination of mathematics, global connectivity, and trust that resides in people using Facebook.

The Idea of Libra Currency

When the Venetian merchant Marco Polo got to China, in the latter part of the thirteenth century, he saw many wonders-gunpowder and coal and eyeglasses and porcelain. One of the things that astonished him most, however, was a new invention, implemented by Kublai Khan, a grandson of the great conqueror Genghis.