After a while it becomes a pain to lug all that bread around, so what if everyone just agrees to have little bits of paper with “1 bread” written on it in place of actual bread, and we can use that. Someone gives you a bit of bread-paper and later if you need bread, you can just go see them at home, or wherever they keep their bread, and get a loaf or two as agreed.
But of course people will just write “1 bread” without actually having the bread so it’s better if we have some central authority where people can swap their bread for carefully drawn bits of paper that can be verified as real, and if anyone wants bread they can just go to that authority and swap their paper back for bread.
You don’t have to go and actually get the bread of course. Nearly everyone will take the bread-paper as a replacement for actual bread, because hey, if they really need bread they can go to that central authority and get bread. And it’s good bread, high quality stuff, so everyone trusts them to give them bread if they need it, but how many people really need all that actual bread? It’s much easier to swap bits of bread-paper for that motorcycle, or groceries, or whatever, rather than pass actual bread around the place.
But then after a while it becomes a real nuisance to hold all that bread somewhere, so how about we just hold a nominal amount of bread, say, enough to cover people who might want to change their bits of paper for bread today, and for the rest of the bread we’re supposed to have we’ll just keep track of who has how many bread-papers in a journal.
And so on and so forth, until there’s no bread at all and hardly any bread-papers even, and we’re transferring bread-papers electronically using phones and plastic cards with a lot of smarts in them and in the end we’re just mucking around with bread-numbers in a book somewhere.
After a while it becomes a pain to lug all that bread around, so what if everyone just agrees to have little bits of paper with “1 bread” written on it in place of actual bread, and we can use that. Someone gives you a bit of bread-paper and later if you need bread, you can just go see them at home, or wherever they keep their bread, and get a loaf or two as agreed.
But of course people will just write “1 bread” without actually having the bread so it’s better if we have some central authority where people can swap their bread for carefully drawn bits of paper that can be verified as real, and if anyone wants bread they can just go to that authority and swap their paper back for bread.
You don’t have to go and actually get the bread of course. Nearly everyone will take the bread-paper as a replacement for actual bread, because hey, if they really need bread they can go to that central authority and get bread. And it’s good bread, high quality stuff, so everyone trusts them to give them bread if they need it, but how many people really need all that actual bread? It’s much easier to swap bits of bread-paper for that motorcycle, or groceries, or whatever, rather than pass actual bread around the place.
But then after a while it becomes a real nuisance to hold all that bread somewhere, so how about we just hold a nominal amount of bread, say, enough to cover people who might want to change their bits of paper for bread today, and for the rest of the bread we’re supposed to have we’ll just keep track of who has how many bread-papers in a journal.
And so on and so forth, until there’s no bread at all and hardly any bread-papers even, and we’re transferring bread-papers electronically using phones and plastic cards with a lot of smarts in them and in the end we’re just mucking around with bread-numbers in a book somewhere.
Just want to say my initial comment was a bit tongue in cheek but you actually used it to explain the issue really well, so thank you!