> The two parties just record the details of the trade on a piece of paper and settle up later....
I think this "paper" would precede the use of stones. When the villagers are tired of bartering, they are not going to magically settle on the use of these stones as value. Because even before that, when the "dairy farmer wants to buy corn, even when he does not have milk to trade" the corn farmer is going to give corn in exchange of a declaration (IOU) from dairy farmer that anyone who is in possession of that IOU is entitled to 5 liters of milk (or what ever the corn was worth to the dairy farmer at that point) from him.
New money has entered the system at that point. Because now the corn farmer can use that IOU to barter stuff, either giving corn (produced by himself) or by giving this IOU from dairy farmer (if the other person is interested in accepting milk)
I think this would be a much natural evolution of things...
And then they would face the problem of counterfiet IOUs, and if they had crypto and signing, they would have used signed IoUs. But then they would need a way to reconcile with the fact that the death or incapacitation of the IoU writers. For example, the IOU written by the dairy farmer becomes worthless if the dairy farmer dies.
Then some central body (aka) would enter the picture, as an entity that will never die or disappear, and is the only entity allowed to write IoUs. Solving both the above problems in one fell swoop, by requiring taxes to be paid in its IoUs.
lolakutty · · focus · HN ↗
I think this "paper" would precede the use of stones. When the villagers are tired of bartering, they are not going to magically settle on the use of these stones as value. Because even before that, when the "dairy farmer wants to buy corn, even when he does not have milk to trade" the corn farmer is going to give corn in exchange of a declaration (IOU) from dairy farmer that anyone who is in possession of that IOU is entitled to 5 liters of milk (or what ever the corn was worth to the dairy farmer at that point) from him.
New money has entered the system at that point. Because now the corn farmer can use that IOU to barter stuff, either giving corn (produced by himself) or by giving this IOU from dairy farmer (if the other person is interested in accepting milk)
I think this would be a much natural evolution of things...
And then they would face the problem of counterfiet IOUs, and if they had crypto and signing, they would have used signed IoUs. But then they would need a way to reconcile with the fact that the death or incapacitation of the IoU writers. For example, the IOU written by the dairy farmer becomes worthless if the dairy farmer dies.
Then some central body (aka) would enter the picture, as an entity that will never die or disappear, and is the only entity allowed to write IoUs. Solving both the above problems in one fell swoop, by requiring taxes to be paid in its IoUs.