Crypto Kalasla: History of Money in Telugu – Part 2


Welcome everyone! My name is Ramakanth In our last video we learnt partly about history of money. Just in case if you didn’t watch Part 1, please go back and watch it Because this video is continuation of part 1 So if you understand part 1 then you will be easily able to understand part 2 I shared the link for part 1 video in the description below. Before getting in to topic, as usual small disclaimer Whatever I am discussing in these videos is not a financial advice. These are all my own views coming out of limited knowledge whatever I have So based on these videos do not take any investment decisions. I am not responsible for your profits and losses. So last time we started with Barter system and learned how money transformed till gold Today we will see how money transformed from gold to today’s digital money. So once humans started using gold as money, they used to convert gold in to coins and use them. But in storing these gold coins there used to be a big problem. That is.. “Fear of Thieves” That is why lot of people, to keep their money safe, they used to store their money by digging a pit under their house, or in their backyard, or in some other places that no one could figure out. Sometimes if the person who hid the gold is dead then the whole gold remained under the ground in a place which no one knew. At those times because Goldsmiths used to use a lot of gold, they used to compulsorily hire some security guards and they used to have huge lockers to store the gold. So, as the time went by, people realized that these Goldsmiths can store gold securely. Then people went to those Goldsmiths and requested them to store their gold too and offered to pay certain amount of fees for storing their gold. So Goldsmiths thought “however we are storing our gold” “so if we can store these people’s gold too, we can earn some extra money” and they happily agreed to it. That is how Goldsmiths started storing people’s gold. And that is how the concept of a “Bank” started in our history. Even thought the concept of a “Bank” existed at the time when other metals such as Iron or Copper were used as money, it didn’t gain enough importance. Anyway, a Bank was used only to “store” gold or money and not for any other reason for long time. The Goldsmith who stored the gold used to write a note on a paper saying that “I promise to pay this person (person’s name) some amount (let’s say 1 kg) in gold coins” along with a stamp on that paper. He used to give that paper to whoever deposited their gold with him. In that way, because the Goldsmith is storing people’s gold safely, he used to collect some fees in terms of gold coins every month So, initially the Goldsmith paper note used to have “the depositor’s name”, “amount of gold” “Goldsmith’s stamp” But when people needed to buy some grocery or other things in bulk amount they used to go the Goldsmith, submit the paper note, take the gold coins, then pay the shopkeeper with those gold coins and get the required goods. But even that shopkeeper used to go to the same Goldsmith to store his gold coins (got from his customers) and used to get a new note with “his name” on it. So, you might have understood what is the problem in this system of exchange. If there is a “depositor’s name” on the paper note, people had to go to Goldsmith everytime they needed to transact with someone that is why Goldsmith removed the depositor’s name and simply replaced it with the word “bearer” and kept the amount and his stamp as it is. So that whoever has possession of that paper note will be given the gold coins So what happened after is that whenever people needed to transact (buy or sell anything) they don’t have to go the Goldsmith to take gold coins. They just had to give the paper with Goldsmith’s stamp to the shopkeeper. Because that paper was equal to gold coins, the shopkeeper used to check the amount, and goldsmith’s stamp and used to believe that if he has the paper, it is equivalent to gold coins and used to treat the paper as gold coins and store that paper securely as he used to do with gold coins. He used to use the same paper for trading with other merchants and vendors also. In this way, as the time went by everyone started using Goldsmith’s paper note as money. That is how a “PAPER”, which didn’t had any value at all, was started being used as money. That is how paper currency came in to circulation After some time, as technology started improving for the last 40-50 years Credit and Debit Cards were being used as money. These cards are also known as Plastic Money. Once computers became mainstream, we are converting everything in to electronic form. We converted postal mail to emails, and account books to excel sheets. In the same way, we converted money also in to electronic form and using it as “Digital Money” You might be thinking “Are we really using digital money? Where?” When you are logging in to your bank account online and transferring money from one account to another what do you think you are using? That is “Digital Money” In India, what you are sending from one Paytm account to another is also “Digital Money”. So So in a digital money transaction this is what happens under the hood. A number in your account gets decreased and a number in another person’s account get increased. That’s it! Just the numbers that are displaying on a computer or a mobile screen are being regarded as money and trusted by us. “Money” has become “intangible” now. That means it became something that we cannot touch. Of course it still didn’t completely become intangible. We still have paper currency. But, more and more we are galloping towards complete digital currency. Serious efforts are happening in every country to eliminate cash In our country (India), the “Demonetization” that happened in 2017, the “Digital India” campaigns happening currently are all part of these efforts. In Australia and USA there are proposals to ban 100 dollar note. In some countries people are using digital money on a daily basis. For example: In countries like Sweden, almost 60% of the transactions are happening digitally. Lot of banks in Sweden don’t store any cash at all. So already digital money has entered our daily lives. We are using it daily without even realizing that it is digital money. So from these two videos the most important thing that we need to note is that, though money started off as Barter System, from there it transformed in to Cattle, then from Cattle to Commodities, from Commodities to Metals, from Metals to Gold, from Gold to Paper Currency, from Paper Currency to Plastic Cards (Credit and Debit Cards), and from Plastic Cards to “Digital Money” That means, one important thing to grasp here is that Money can be anything! Whatever a group of people around you believe to be money, that becomes money. Money is just a “trust” For example: If a human from 3000 years ago time travels and comes to present age and gives you cowry shells and says “hey these shells are very valuable” “this is money”, then you are going to laugh right? In the same way, If you put paper currency in his hand and say “hey this paper is money”, he will also laugh! But the interesting thing here is that, both of them are telling truth based on what they believe is money. Interesting right? Anyway I am repeating this point once again: Money is just a story that is believed by a group of people and that story can change Repeat with me: Money is just a story that is believed by a group of people and that story can change. Money is just a story or a trust That story changed in the past – from commodities to metals and from metals to gold At present that story is changing from paper to plastic and from plastic to digital money And there is a chance that it can change in future too Most probably from central bank digitial currencies to decentralized CryptoCurrencies If you can understand this, then you will at least think “Does Bitcoin have any chance of becoming money?” “Does Bitcoin have all the properties possessed by things that were used as money in the past?” If you do not understand this monetary history, then you will also think the same way as others: “There is something called Bitcoin, it looks like we cannot touch it, but it is money it seems, some bullshit” “why anybody want to get into that nonsense”, and ignore it completely. Now you know about monetary history. Which is great! Because until three years back, I didn’t know it. Even though we work our entire life for money, we never learn about the history of money. So sad! Isn’t it? Anyway, now you know about monetary history but just think if you know the answers to the following questions: Gold is available scarcely in the ground and people have to mine for it to get it above the ground. But who creates this paper money and digital money? How much do they create per year? Whatever money that we are storing in our banks, do we really own it? What is meant by Bank Runs? What is meant by Fiat Currencies? What is meant by “Fractional Reserve Banking”? Is there any damage happening to middle class people because of it? Why is the value of Rupee dropping? For example: at the time when my father was 10 years old that means in 1964, they used to get a big bag of rice for 60Rs. i.e. 100 kg of rice for 60Rs. Currently for the same 60Rs we are getting 1 kg of rice only. Why? For this question, generally either my parents or your parents will answer as: because the population is increasing, prices are also increasing. Simple. In 1964 population of India was 48 crores Currently it is 134 crores, that means population increased by 3 times. But the price of Rice has increased from 60Rs per 100kg to 6000Rs per 100kg That means it increased by 100 times. Is that 100 times increase in prices really because of population growth or is there anything else happening? Why are these prices going up so drastically? To find answers to these questions please watch the next video without fail. Thanks once gain for watching and hope this is helpful! Bye!

2 thoughts on “Crypto Kalasla: History of Money in Telugu – Part 2

Leave a Reply

Your email address will not be published. Required fields are marked *