The interesting thing about money is that it is fungible. Meaning it is able to replace or be replaced by another identical item. Money can be mutually interchangeable, and, over the years, it has been exactly that. In order to really understand why cryptocurrency can take on the more tangible dollar of today, one needs to understand more about the economic theory and how it’s applied to currency.
In our day to day lives, we think about money as being a limited resource. It may seem like we don't have enough. At the end of the month the bank account may be low, or unexpected expenses pop up and we struggle to find the money sometimes to cover them. But, in reality, that's not true. Money as we know it, such as the US dollar or Euro is actually unlimited. If the government wants to print more money, it can. Money, therefore, is actually in much more abundance than one might think.
Let's go back and take a look at the first form of money - trading - or giving something to get something in return. In 6000 BC, if I wanted a camel for riding across the desert, I traded my cow to get the camel. It was all part of the barter system. This is one of the first forms of commodity money. Commodity money is a physical good that has "intrinsic value" or in this case, I truly just traded a physical animal for another physical animal that has a specific use for me.
Moving forward to 1,200 BC, I would have found myself trading cowrie shells. These mollusk shells, or sea shells, widely available in the waters of the Pacific and Indian Ocean, rose to currency during the Shang dynasty and were one of the longest and most widely used forms of currency in history. Another example of a commodity.
Around 500 BC, the more modern coins of today began to appear. Metal coins were created for business purposes. These coins, used near the capital city of ancient Lydia (Turkey), were created from electrum, or a natural alloy of gold and silver. The metal coin caught on and over time the Greek, Persian, and Roman empires adopted forms of metal coin trade. These coins often featured various gods or emperors in order to mark their authenticity. Interesting how the coins of today appear in much the same fashion.
It was not until 806 AD that the appearance of paper currency made itself known. During this time, a group of rich financiers and merchants made the currency popular, using it because it was easier to carry around and it allowed for precious metals like copper to be used in making everyday essential objects. This is where we jump off into modern day currency, and that actually lands us right in the middle of a debt conversation.