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The History of Money in America: From Beads to Virtual Currency

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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:

The History of Money in America: From Beads 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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Blockchain

Mapping the Most Important Ethereum Forks

Ethereum is the world’s second biggest cryptocurrency by market cap. This graphic maps the major forks that have defined Ethereum’s growth to date.

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Ethereum Hard Forks

Mapping the Major Ethereum Forks

Many people are familiar with blockchain technology, but did you know that Ethereum has the largest and most active blockchain community in the world?

Unlike many other blockchain networks, Ethereum is programmable. This customizable feature has enabled developers to solve problems ranging from digital identification and privacy, to corporate ownership and data security.

When the blockchain community disagrees on what changes the network needs to function smoothly or when such changes should take place, developers plan for a fork (an offshoot) of the underlying code rules.

Today’s graphic maps out the major Ethereum blockchain forks that have occurred to date, highlighting key events that surrounded each of these updates. It also includes details on the highly anticipated Istanbul hard fork, planned for December 2019.

Four Types of Forks

Forks are common practice in the software industry, and happen for one of two reasons: split opinions within the community, and required changes to the blockchain code.

When either reason is discussed, four major types of forks can occur.

  1. Codebase Forks: Copy of the original code, to allow for minor tweaks without developing the whole blockchain code from scratch.
  2. Blockchain Forks: Branching or splitting a blockchain’s whole transaction history, causing the new network to develop a distinct identity.
  3. Soft Forks: Gradual software upgrades—bug fixes, security checks, and new features.
  4. Hard Forks: A permanent division of the blockchain.

There are currently three types of hard forks:

  • Planned
    Scheduled upgrades to the network, often abandoning the old chain
  • Contentious
    Community disagreements cause major code changes, forming a new chain
  • Spin-off Coins
    Minor changes to the blockchain’s code that create new coins

Let’s dive into the timeline of major Ethereum forks, and explore a few of their defining moments and characteristics.

Mapping the Major Ethereum Forks

Below are some of the most prominent and important forks—both hard and soft—on the Ethereum blockchain since its launch.

Ethereum

Vitalik Buterin, founder of Ethereum, and his team finished the 9th and final proof of concept known as Olympic in May 2015. The Ethereum blockchain, also known as Frontier, went live shortly after, on July 30, 2015.

Ice Age

Also known as “Frontier Thawing”, this was the first (unplanned) fork of the Ethereum blockchain, providing security and speed updates to the network.

Homestead

Homestead is widely considered Phase 2 of Ethereum’s development evolution. This rollout included three critical updates to Ethereum: the removal of centralization on the network, enabling users to hold and transact with ETH, and to write and deploy smart contracts.

The DAO

The Decentralized Autonomous Organization (DAO) event was the most contentious event in Ethereum’s short history. The DAO team raised US$150 million through a 2016 token sale—but an unknown hacker stole US$50 million in ether (ETH), prompting the developer community to hard fork in order to recover the stolen funds.

Ethereum Classic

Widely regarded as the only Ethereum fork of any significance, this hard fork was based on the controversial DAO event. The original chain became known as Ethereum Classic, and the new chain moved forward as the main Ethereum chain.

Atlantis

This September 2019 hard fork event required all software users to upgrade their clients in order to stay with the current network. Enhancements included better security, stability, and network performance for higher volumes of traffic.

Metropolis-Byzantium

Regarded as the third phase of Ethereum’s evolution, the Metropolis-Byzantium soft fork functioned more like an operating system upgrade, rather than a full split.

Metropolis-Constantinople

Constantinople is the current version of the Ethereum blockchain. This hard fork occurred concurrently with the St. Petersburg update. Important changes included closing a major security loophole that could have allowed hackers to easily access users’ funds.

Constantinople’s most notable improvements include smart contracts being able to verify each other using only the unique string of computer code of another smart contract, and reduced gas fees─namely, the price users pay to process transactions more quickly.

Future Forks in the Road

The Ethereum community is preparing for the next hard fork event Istanbul, scheduled for release on December 4th, 2019.

Ethereum’s 4th and projected final stage of development is Serenity, which has yet to be scheduled. Community members have speculated what changes will come with Serenity, but many agree that the Ethereum blockchain will shift focus from Proof of Work to Proof of Stake.

  • Proof of Work (PoW): “Miners” are rewarded with cryptocurrency for solving puzzles that process and post blocks of data to the network
  • Proof of Stake (PoS): Miners are chosen from a pool of miners, based on the stake of cryptocurrency they bid; no puzzle = no reward

Proof of Stake means that there is less competition for completing blocks of data, significantly reducing the energy required to process data. Currently, a single Bitcoin transaction consumes the same electricity as 1.75 American households do in a day.

Ethereum Leads the Way

Ethereum continues to be a leading blockchain platform, with the highest number of decentralized apps (dApps) and a massive, engaged community.

To date, cryptocurrencies have largely been the focus of news headlines. However, we’ve only begun to scratch the surface of what blockchain can offer, and the value it will create beyond the financial world.

[Blockchain] could be the foundation of a whole new era whereby our basic right to privacy is protected, because identity is the foundation of freedom and it needs to be managed responsibly.

—Don Tapscott, Executive Chairman of the Blockchain Research Institute

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Blockchain

Visualizing the New Cryptocurrency Ecosystem

Cryptocurrencies have evolved past digital cash. This graphic explores the the new cryptocurrency ecosystem and how it’s impacting the modern economy.

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New Cryptocurrency Economy

Visualizing the New Cryptocurrency Economy

Over a decade ago, the birth of Bitcoin sparked a revolution in the digital world — and just last year, the number of active cryptocurrencies jumped from roughly 1,600 to over 3,000 worldwide.

Cryptocurrencies have now evolved past simple digital currencies, offering solutions to meet the complex needs of modern financial markets.

Today’s graphic from Abra visualizes the complex, ever-evolving cryptocurrency ecosystem and its real-world applications.

Characteristics of Cryptocurrencies

Why are cryptocurrencies important for the future of digital finance?

  • Borderless
    Drastically reduces fees and processing times due to a lack of cross-border restrictions
  • Censorship-free
    Prevents governments or major institutions from blocking financial activities at whim
  • Greater financial control
    Individuals can have total control of their funds
  • Greater security
    Prevents fraudulent alterations from third parties
  • Lower costs
    Lower transaction fees thanks to fewer third parties
  • Greater Accessibility
    Reduces or eliminates traditional barriers to capital markets

Much like the internet has forever altered how we live and work, cryptocurrencies have the potential to change how people participate in global financial markets.

Categorizing the New Crypto Economy

Today’s cryptocurrencies go beyond replacing cash. This new token-based economy is evolving─with unique solutions emerging in finance, security, identification, social engagement, and ownership.

Cryptocurrencies are generally categorized by their primary application within the ecosystem:

  • Payments
    Digital cash can be used for both ecommerce and brick-and-mortar retailers
  • Store of value
    New form of scarce native currency and a means of settlement
  • Programmable money
    Borderless money that enables easy conversion between currencies
  • Stablecoins
    Crypto version of fiat which is tied to the value of resources like gold or the U.S. dollar
  • Privacy
    Private digital transactions, with some offering anonymity
  • Digital ownership
    Digital handling, storage, and monetization of data
  • Decentralized utilities
    Crypto-enabled networks, products, and services that exchange between assets
  • Alternative finance
    Digital assets such as collectibles, commodities, and tokenized securities

Cryptocurrencies are adding both value and utility to the digital economy, and to the global financial market as a whole.

Applications of Cryptocurrencies

Because cryptocurrencies are programmable, customizable computer code, developers can design and adapt them for many use cases within the digital economy.

How are these various cryptocurrencies being used in everyday applications?

Current Projects

  • SPEDN auto-converts crypto to fiat for merchants, reducing exchange rate risk while offering convenient customer payment options.
  • Slice offers real estate investing to anyone for as low as $10,000 through fractional investment.

Near-future Projects

  • CyClean plans to launch a blockchain-enabled electric vehicle (EV) fleet that mines crypto as users travel—reducing emissions and rewarding users for doing so.
  • Digital construction platform Builderium connects contractors to clients around the world through blockchain, opening up a global marketplace of potential deals.

These are just a few of the ways cryptocurrencies are breaking down barriers for people and companies worldwide—allowing them to grow personal wealth and enter the global market.

The Growth of the Crypto Economy

Worldwide, the numbers show that blockchain-based technology and cryptocurrency use is growing. Blockchain wallet users rose from nearly 9 million in 2016 to over 42 million in 2019.

Developers produced a mere 100 decentralized apps (DApps) in 2015─with that number skyrocketing to over 3,100 by 2019.

Overall, cryptocurrencies are helping to create an innovative and accessible financial system around the world.

Cryptocurrency deserves an opportunity to find a sustainable future in our economy.

—Adena Friedman, President & CEO of NASDAQ

While the future of the new cryptocurrency economy is still taking shape, one thing is certain─cryptos are forever altering the way we view and measure the value of money.

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