THE HISTORY OF FIAT MONEY/CURRENCY
Bronze and Copper cowrie were manufactered by China at the end of the Stone Age and could be considered some of the earliest forms of metal coins.Metal tool money, such as knife and spade monies, was also first used in China.The Lydians became the first Western culture to make coins from Gold and Silver around 700 B.C. Soon other countries and civilizations began to mint their own coins too.They all have this idea that using coins with set values made it easier to compare values and trade money for goods and services. So,Gold and Silver became money(Medium of exchange for good and services) for majority of the world's trade. Then about a 1000 years ago China officially used paper money for exchange of goods. Other countries also, tried to use Paper money all because the supply of Gold and Silver were not enough to meet the demand.But they were all not successful due to inflation.So, these nations decided to backed the paper money with the metal money(Gold and Silver) to help control inflation,since Gold and Silver cannot be just printed.Wars within and between countries depleted silver reserves since silver is good for making all kind of tools for war,home appliances etc.So, in 1821 a gold-only standard was adopted. During and after world war II, many nations shipped their gold to New York Federal Reserve vaults in the united states for safe keeping and in return those nations receive the dollar as a proof of their gold deposit with the united states. The dollar or any other fiat currency serves as a receipt or proof of deposit giving by banks during the gold-only starndard era and it could be used to trade on the local and/or international market.In 1944, in accordance with the Bretton Woods Agreements among nations, the United States Dollar was selected as the world's reserve currency.Under the Bretton Woods Agreements of 1944, central banks of other countries holding United States Dollars could exchange them for gold.Since the United States had the most gold in the world and was a massive industrial power that ran a trade surplus, its gold holdings were usually increasing in the late 1940's and 1950's. US then decided to peg other countries currency to the US dollar.But then, the value of the dollar started going up drastically and that cause inflation in the nations that were peg to the US dollar since more local currencies were needed to be printed to match the dollar.So,France decided to return their receipt which is the dollar to get their gold from the US. And more and more nations were getting their gold and that was depleting the US gold reserves. So, in 1971 Richard Nixion took off the US Dollar from the Gold standard. Meaning, if you own us dollars, you could not return it for gold.Other countries started doing the same and that is how money backed by nothing came into existence. All fiat currencies are just pieces of papers that used to be receipt for Gold Deposits by central banks.fiat currencies have no value except the value we give to each of them.
WHERE DOES STEEMIT MONEY COMES FROM.
Steemit is a social platform like Facebook, google, linkedin,etc. The only difference is that you get pay on steemit for creating content and your contents don't get flooded with advertisements.Facebook is worth over 500 Billion and google is worth over 700 Billion and the fact is, if we all decide to stop using facebook and google tomorrow these valuations would probably get close to Zero.It's you and me and everybody using facebook and google, creating content that gives these valuations to them but we get nothing for it. Instead this companies will get sold and owners cash out Billions while me and you are on these platforms working hard like bees creating contents.
So,steemit wants to do it different by paying any content creator on steemit with STEEM which is a token on steemit platform similar to companies coupons. This Steem token can be converted to any crypto currency on an exchange.As more people join steemit to create contents, the valuation of steemit goes up and that makes steem token also more valuable. Steemit money comes from me and you creating content on steemit and we get pay in STEEM which is the token used on steemit platform, similar to companies voucher or coupons or receipt for gold deposit. But STEEM cannot be printed.
