Thousands of years before banks, credit cards, or digital money

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Transcript

00:00In medieval London, gold was valuable, but dangerous to keep.

00:04So merchants began storing it with goldsmiths, protected by locks, guards, and stone walls.

00:10In return, they received written receipts, proof their gold was safe.

00:14Over time, those receipts became more convenient than the gold itself.

00:19Then, disaster struck.

00:21A goldsmith lost the gold he was guarding, stolen, mismanaged, or destroyed.

00:26The vault was empty, but the receipts were still out there, and something unexpected became clear.

00:34Not everyone came to claim their gold at the same time, so the goldsmith kept issuing receipts anyway.

00:40Paper promises replaced metal.

00:43Soon, those receipts were being traded between merchants, no gold ever moving.

00:48Value had separated from the thing it once represented.

00:51What began as secure storage quietly became lending, and lending became banking.

00:57Without meaning to, medieval goldsmiths created paper money and the foundation of the modern financial system.