The History of Money in America: From Beads to Virtual Currency
The first settlers in Pre-Revolutionary America were faced with a problem. There was a shortage of money in the colonies, and England prohibited settlers from minting their own coinage.
To get around this, settlers used established foreign currencies such Dutch guilders or the Spanish pieces of eight. They also began to adopt the traditional trading methods of Native Americans, who had been exchanging goods for hundreds of years before the arrival of the Europeans.
Wampum as a Currency
Wampum, or beads that were strung together, was often used as a medium of exchange for both Native American tribes and settlers during this Pre-Revolutionary era. Other commodities were also used for trade: furs, tobacco, wheat, and maize were all currencies of exchange.
As an interesting side note, wampum had tremendous inflation issues. Some tribes, such as the Narragansetts, were better at producing the beads than others. Many settlers also started comprehensive wampum manufacturing operations, and the beads were created at such a rate that they began to lose value in trade quickly.
Where does the storied history of money in the United States go from here? Today’s infographic highlights many interesting aspects of it, moving from beads all the way to virtual currency:
Image courtesy of: JPMorgan Chase
In the modern era, the concept of “money” is changing right before our eyes.
Throughout most of the history of money, it has been a tactile thing. Whether we’re talking about strange currencies such as cacao beans or wampum beads that were traded in the past, or we’re looking at more modern concepts of coinage, money has traditionally been something physical. Bank accounts, cheques, credit cards, and future digital technologies would eventually rise to prominence, making money much more abstract.
Today, everything is digital in nature.
With a few clicks, money can be created or moved around. Bitcoin and the blockchain ecosystem have evolved as new technologies that may also have a significant impact on the future of money.
The history of money in America, and the world, is constantly changing. It’s beautiful and scary all at the same time.
Original graphic by: JPMorgan Chase
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