before money Copy

At its core, money is a technology; a tool for communicating, transacting and storing value. In the modern era we have elaborate monetary networks, a global financial market, ledger-based digital fiat (i.e. the dollars in your banking app), cash, credit, etc. It includes the Visa/Mastercard network, interbank settlements, treasury bonds, equities, collateralized debt obligations, interest rates, a ballooning national debt, yada, yada, yada…

It's a system obfuscated in jargon; leaving the average person to entrust financiers and central bankers with oversight of a technology tied to the rise and fall of empires — money.

Considering the number of societal problems downstream of bad monetary policy, it’s concerning that most people can’t define what money is (let alone the mechanics of the ever-growing wealth gap).

Understanding money, the basis of financial literacy, is a human right neglected in our modern education system (seemingly intentionally). To quote Henry Ford,

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

But I digress.

Why start at the dawn of humanity? Because money is not complicated; systems are. And the only way to verify the problems of the current fiat monetary system — to have an objective view on Bitcoin — is to explore how we got here.

Part One: The Dawn Of Humanity

“Not in innocence, and not in Asia, was mankind born.”

This is how Robert Ardrey opens his 1961 book, African Genesis. In it he explores the hypothesis that humans evolved from violent, predatory ancestors who discovered the use of weapons. It’s work that Stanley Kubrik cited as influencing 2001: A Space Odyssey.

The idea originated with the first discovery of Australopithecus, an early hominin that walked this earth between 4.18 and 2 million years ago.¹ Its remains were found among other animals and a hypothesis emerged that Australopithecus utilized those bones and horns to hunt various animals; even participated in cannibalism.²

Aggression and violence as the earliest catalysts for human evolution makes for quite the cinematic experience, but is a far cry from reality. Examination of Australopithecus teeth found microscopic evidence of a plant based diet. And puncture marks in some skulls point to the small ape being prey; not a predator.³ Those bones and horns were not weapons, but likely the collected remains of a big cat’s meal.

The reality of being helpless prey in a world of apex predators, begs the question — how did our ancestors even make it? And what does this have to do with money?

Channeling Energy

If money is “social, economic energy”, as Michael Saylor puts it, then a first principle approach requires us to examine the channeling of energy before money — before Homo sapiens — and the technological advancements that shaped our evolutionary path.

Note: This is heavily influenced by the Michael Saylor series on Robert Breedlove’s What Is Money Show. With an aerospace engineering and the history of science background from MIT,  Saylor has a unique way of articulating the evolution of technology and the channeling of energy. This article won’t do the series justice (see for yourself), but I will bogart the parts I find useful.‍

There are no fair fights in nature; no honor or integrity. When there's an opportunity for an asymmetric attack — it’s taken. Lions chase down the weakest, slowest wildebeest. Chimps hunt other chimps when it's an 8:1 fight. Orcas hunt in packs. Golden eagles harness the power of gravity; mastering death from above.

In this sense, humans are unique in the animal kingdom. We are the evolutionary byproduct of innovation. Without the use of tools, without channeling energy, we couldn’t have leveled the playing field to eventually become the apex species that we are.

It all started with rocks.

Stone Tools

Our earliest tools were rocks. Stone flakes dating back 3.3 million years ago⁴ point to tool use by Australopithecus. More advanced Oldowan tools⁵ emerged around 2.5 million years ago with Homo habilis, the “handy man.”

Absent claws and sharp teeth, these stone tools helped early hominins scavenge; scraping meat off of carcasses and smashing bones for nutritious marrow.⁶ These tools were so simple, they are hard to distinguish from a naturally occurring object.

Then came the Acheulean tools of Homo erectus, dating back 1.6 million years ago. These were much more advanced; with symmetrical and bifacial designs pointing to evolved intelligence. Surface-wear patterns of these hand axes show they were used for the butchering and skinning of animals, digging, and cutting wood and plant material.⁷

The exact “who, what, when, where” of meat consumption by early hominins is a messy timeline, but it’s clear that stone-tool-assisted scavenging existed first.⁸ Then more sophisticated methods of meat consumption were adopted.

A butcher site in Kenya suggests regular consumption of aquatic animals; rich in fatty acids essential for brain development.⁹ Also in Kenya, 97 footprints were found along a lakeshore, indicating various hunting parties.¹⁰

There’s even the possibility that Homo erectus could have hunted with primitive missiles (i.e. throwing stones). The capacity to throw emerged with Homo erectus 2 million years ago.¹¹ If they had the mental capacity to craft handaxes, it’s not far-fetched to think they could have realized the benefit of projecting power from a distance.

With stone tools our ancestors could hunt and butcher animals, access bone marrow that could be stored for several weeks¹², and had ability to cut plant material — meaning fuel and potentially primitive rafts*.

*Note: This is highly debated — but hand axes found on the island of Flores in Indonesia, and Crete in Greece, suggest intentional seafaring in large numbers.¹³

Fire & Fuel

If Prometheus did indeed steal fire from the gods, he gave it to Homo erectus well before the first Homo sapien walked the Earth. A cave in South Africa shows regular use of fire for cooking over one million years ago.¹⁴

From an evolutionary standpoint, the significance of fire is the ability to cook meat. Cooking both removed dangerous bacteria and pre-digested meat for consumption. This meant a significantly higher intake of calories and nutrients. It’s credited as one of the primary reasons for our large brain size today.¹⁵

But there’s a chicken and the egg question — did we discover fire because of increased intelligence? Or did discovering fire increase our intelligence?

Lightening strikes and forest fires are too sporadic and spread out for evolution to occur. Rubbing sticks together and sparking flint stones are too technical of tasks to accidentally discover. The most compelling, and probable answer? — 🔥 Lava 🔥

East Africa, the Cradle of Life, where many of the oldest hominin discoveries are found, is located within the Great Rift Valley. Here, continental plates spread apart and lava flowed to the surface.

“For tens of thousands, arguably hundreds of thousands of years, in the Great Rift Valley there were giant lava flows that would have had front edges; warm spots; hot spots that you could go.” — Medler (TEDx

Considering our earliest ancestors were bi-pedal; capable of collecting and transporting fuel (i.e. wood); it’s likely the first bonfires were sourced from a lava flow. Meaning — we didn’t need to learn how to make fire; we just needed to play with it. Maybe the first “cooked meal” was an animal caught in a grass fire we recklessly spread. Who knows 🤷‍♂️. However it happened, this environment led to the discovery of cooking meat.

It seems obvious that the rise of Homo erectus is directly correlated with fire and cooking. Without access to a grocery store, it's improbable that a raw food diet could have provided the necessary caloric intake to sustain their larger size and brain.

Lava flows are a beautiful explanation for early hominins’ use of fire. And oddly enough, it somewhat aligns the story of Prometheus. But instead of being a gift from a Titan god, our access to fire was a gift from Mother Earth.

Language & Communication

Homo erectus was an impressive creature; much more intelligent than the dumb brutes portrayed in popular culture.

There’s even reason to believe they had a language; arguably the most important tool in our evolutionary tool belt. Language would have been needed for hunting parties, passing on the specialized skill of tool building, and the coordination required to sail (again — potentially sail).

First consider that the basic building blocks of language can be found in our closest living relatives. Chimpanzees communicate with gestures and orangutans can be taught to use symbols. Training is possible because of a “monkey see, monkey do” mirror system in their brain. It’s the same part of the brain we use for language (TEDx).

Furthermore, stone tools themselves suggest Homo erectus would have been capable of language. Brain scans show that…

“…the parts of the brain involved in coordinating the complex behavioral sequences involved in making a stone tool actually overlap with the parts of the brain that are involved in the complex sequences that go into putting together a sentence.” — Dietrich Stout

So yes, Homo erectus had the speaking apparatus of a gorilla. But does that even matter? Is that, plus gestures, enough to facilitate coordination and collaboration? Consider that a gorilla is capable of at least 16 vocalizations and the Pirahã language of the Amazon only requires 11 sounds (watch/listen).

Off to the races

With stone tools, fire, and the ability to collaborate, the stage was set and the evolutionary race was on. We eventually reach a point in the human story where anatomically modern Homo sapiens lived alongside Neanderthals and Denisovans.

When the first homosapien came to be is still a mystery. One discovery puts the oldest fossil remains at 300,000 years ago.¹⁶ Another at 210,000 years ago.¹⁷ What’s important is that somewhere between 40,000 and 30,000 years ago, we were the last ones standing.

Evidence of large settlements start around 11,000 years ago with the ongoing excavations at Göbekli Tepe and Karahan Tepe in Turkey. And by 4,500 BC the earliest known civilization was formed; Sumer.

This is the origin story of Homo sapiens. Now let's look at the origins of money.

Part Two: Early “Folds” Of Money

If you could fold a piece of paper onto itself 50 times; how thick is that piece of paper? A foot? To the ceiling? The answer? — To the sun.

I first heard this from Jeff Booth (this talk is worth the watch). It’s a useful trick for helping you conceptualize exponential patterns. In the context of this article, the relevant takeaway is that in early folds of technology, not much changes. In later folds, it advances drastically.

Homo erectus walked the Earth for 2 million years; technology didn’t change all that much. In 1983 the internet was born; technology has changed exponentially. So from this lens, what are the earliest folds of money that eventually lead to Bitcoin?

Symbolic Value

While there’s nothing to suggest sophisticated markets, early hominins had a number of valuable goods with intrinsic value — tools, meat, grain, eventually pottery, etc. But evidence of symbolic value goes all the way back to Australopithecus.

The Makapansgat pebble is a small stone dating back nearly 3 million years ago. It resembles a crude rendition of a face and is considered one of the earliest manuports — an item taken deliberately from its environment; chosen for its beauty.

A single handaxe, dating back 430,000 years ago, was found in a burial site of proto-neanderthals. It was made from red quartz, a stone not commonly found in the area. The idea of this being part of an ancient funeral ritual is not far-fetched. Fossils of recently discovered Homo naledi, suggest that other primitive hominins participated in burial practices 335,000 years ago.¹⁸

The pebble may have been captivating to look at, but the handaxe is clear evidence of symbolic, cultural value being added to an item. One could imagine the importance given to stone tools (considering they made life possible).

This behavior must be an important evolutionary trait. Otherwise, why expend energy to make a tool out of a hard to find stone — just to abandon it? Regardless of the reason, both items appear to be the precursor to collectibles.

Jewelry

Is jewelry money? No. But with jewelry, we enter the realm of “proto-money”; valuable collectables. 130,000 year old eagle talons, donned by Neanderthals as personal ornaments, didn’t have any intrinsic value — but one could imagine them being culturally symbolic. They also hold the properties of a collectible as described in Nick Szabo’s, Shelling Out.

(1.) They have an “unforgeable costliness”. Capturing these giant birds of prey wouldn't have been easy to do. (2) Wearing them as jewelry would have protected against loss or theft. (3) Their value could be approximated by simple observation.

The same properties apply to ostrich egg shell beads from 50,000 years ago. However in this case, the “unforgeable costliness” comes from a meticulous manufacturing process.

If you are curious about the behavioral evolution of this collectible phenomenon, I highly suggest reading Nick Szabo’s Shelling Out in its entirety (or listen here). For a taste, here’s the abstract…

“The precursors of money, along with language, enabled early modern humans to solve problems of cooperation that other animals cannot – including problems of reciprocal altruism, kin altruism, and the mitigation of aggression. These precursors shared with non-fiat currencies very specific characteristics – they were not merely symbolic or decorative objects.”

Grainery

10,000 years ago we have evidence of granaries.¹⁹ The storage of barely, lentils, and oats would have acted as a caloric battery vital for growing populations. And in early civilizations, we see this technology evolve into an early monetary system.

Obsidian trade

As early as 6,000 years ago,²⁰ we find that neolithic humans engaged in trade networks; as evident by obsidian traveling large distances from its original source. Is obsidian money? No. But it is  clearly a valuable, exotic good suitable for barter.

Flint Mining

By the late neolithic period, we have evidence of stone tools acting as storage of wealth. A cache of 178 items shows early humans valued flint tools enough to hoard them for future use or possibly trade. Around this same period we also see mining operations. This points to the beginnings of a resource-based economy made possible by the division of labor.

Metallurgy

After a couple million years of evolution, we eventually discovered that copper could be smashed into shapes. Cold working copper ores containing arsenic became our earliest form of bronze.

By the fifth millennium B.C, humans had developed copper smelting; as made evident by ceramic blowpipes found in northern Mesopotamia.²¹

Tools and decorative items were first to adopt this new technology; axes, needles, foil, rings, etc. From a “technology is deflationary” perspective, consider how the advent of a metal needle²² would have impacted a cultural transformation in textile and clothing.

With the rise of metallurgy and various marketable goods comes an increased demand for trade and robust trade networks. This growing need for mediums of exchange is what leads to early commodity and ledger-based money.