Once upon a time, before there was any money, individuals in small
communities would exchange products and services with each other.

To have a standard unit of measurement that was generally accepted
by all, things like shells, cocoa beans, feathers, or even pretty
stones were used to denote value.

Gold and silver, being soft, attractive, and easy to work with,
soon were adopted by many cultures as a new standard. Goldsmiths
made trade much easier, by casting coins -- standardized units
which could be measured to verify their purity.

The goldsmith needed a vault to protect his gold, and soon townsmen
would come to the goldsmith to safeguard their gold as well. The
goldsmith also made money by lending out his gold to fellow
townsmen, charging interest.

Claim-checks (receipts) the goldsmith would write would be used in
the marketplace for commerce, instead of the gold itself. This
paper money was much more convenient because the exact amounts
could be written down instead of being laboriously counted
one-by-one.

Not everybody would ever come to reclaim their gold at once, so the
goldsmith realized that he could lend out OTHER PEOPLE'S gold,
charging interest, and making the interest money himself.

Eventually, depositors found out what was going on. But instead of
demanding their gold back, they simply asked the goldsmith, now
more banker than artisan, to cut them in on the profits of the
interest he was collecting.

This was the beginning of banking. Depositors loan money to a bank
at a small interest rate. The bank loans that money out at a much
higher interest rate to a borrower. The difference in interest
from depositor to borrower is kept by the bank to cover operations
and profit.

We really need to go back to a gold standard in this county. Our money's all but worthless because there's nothing backing it up.

interesting read thanks