Bitcoin, in its nine years of existence, has steadily gained traction, defining itself as a new digital gold. Early adopters of this technology have shown excitement for the potential of this inflation-proof sound money. With steady increase in value over the years, this new invention of money has established its position in finance. The gold rush pushed by the price explosion reached its peak at the end of 2017. Halfway into this year, bitcoin has moved into a bear market. As the price plunged, followed by exchange hacks and speculators leaving the space, the rally quieted down. Now that the fever has cooled off, a narrative that runs quietly behind the scenes can begin to emerge.
For many veteran crypto enthusiasts, Nick Szabo’s paper “Shelling Out: The Origins of Money” has become a guide for a rite of passage deep into the world of Bitcoin. In this essay published in 2002, Szabo, a legal scholar and cryptographer who invented bit gold, shared his odyssey of discovering the roots of money in the ancient past. Building on the insights of evolutionary biologist Richard Dawkins, who saw money as a “formal token of delayed reciprocal altruism,” Szabo found in the precursor of money the beginning stage of developing tools for cooperation.
This astute scholar of money learned how these primitive forms of money, among other functions such as inheritance and insurance against starvation, gave humans a mechanism to deal with conditions in a much more civil way, at a time when hostility and distrust among tribes were strong. He noted how wealth transfer was used to carry obligation and rights, and enforce contracts such as for purchasing mates and for entering another band’s territory to hunt and gather goods, as well as a way to dispute resolution and mitigate wars and cycles of revenge.
Wisdom of Peacemakers
At its origin, money played a role in tracking favors and as an enforcer of reciprocation. It performed as a vehicle to civilize our beast-like nature, taming and guiding it