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33

Evolution of Money
“
Neither a state nor a bank ever have
had unrestricted power of issuing paper
money without abusing that power.
”
–David Ricardo, British Classical Economist
M
oney is arguably one of the greatest inventions in human
history. By facilitating trade and growth, money enabled a highly
complex economic system that has helped raise our standard of living,
spark new technologies, and create immense amounts of wealth.
However, the trouble with money has always been
the same. Although economists mostly agree that
money has certain properties, there is no universal
monetary system that everyone agrees upon.
For this reason, how a monetary system should work
is open to interpretation, and this can lead to its abuse
and misuse. Throughout the history of money, we’ve
seen precious metals debased by short-term thinkers,
catastrophic occurrences of hyperinflation or deflation,
and even the destruction of entire fiat currencies.
credit are intertwined in the current banking
system is one example. Another is the invention
of decentralized digital currencies such as
Bitcoin, which make it clear that people’s
interpretations of money can turn on a dime.
In the Evolution of Money, we explore early
origins of money, the birth of credit, today’s
monetary landscape, and what a digital future
may mean for how money works.
In modern times, the concept of money has
become even blurrier. The way that cash and
34

Evolution of Money
CHAPTER MAP
Derivatives
CURRENCY AND
THE COLLAPSE
OF THE ROMAN
EMPIRE
pg. 39-44
Monetary Systems
COMPARING THE
WORLD'S MONEY
AND MARKETS
pg. 49-54
But having hard
money is just one
side of the coin
Total global debt is a
$200+ trillion market today
Much of global
debt is held by
central governments
Debasing money can
have empire-altering
consequences
THE PROPERTIES
OF MONEY
pg. 37-38
THE HISTORY OF
CONSUMER CREDIT
pg. 45-48
Debt Explosion
Government Spending Habits
35

THE GLOBAL
WAR ON
CASH
pg. 57-62
Digital payments are
faster and more
efficient than cash
DISRUPTING
PAYMENTS
pg. 63-64
Digital Wallets
Governments
seek to eliminate
physical cash
2017 was a
remarkable year for
Bitcoin and other
cryptocurrencies
HOW MUCH
GOVERNMENT
DEBT EXISTS?
pg. 55-56
BITCOIN: THE
JOURNEY TO
$10,000
pg. 65-66
Initial Coin Offerings
36

THE
PROPERTIES
OF MONEY
There are some truths
that can be discerned
about money.
¥35.8M
Many economists
and experts in the field
agree that money is a:
MEDIUM OF EXCHANGE
Can be used to intermediate the
exchange of goods and services.
UNIT OF ACCOUNT
A standard numerical unit of
measurement of market value for
goods, services, and other transactions.
STORE OF VALUE
Maintains its value over time
and can be spent or exchanged
at a later date.
FOR EXAMPLE
FOR EXAMPLE
FOR EXAMPLE
Salt was used as a currency in
several ancient civilizations.
Housing prices in Japan can be
compared using the yen as a
unit of account.
An ounce of gold could buy a
toga in Roman times, and it
can still buy a nice suit today.
37

ACCEPTABLE
Everyone must be
able to use the money
for transactions.
!
Despite these common truths, the very concept
of money is in flux and there are still problems.
In other words,
MONEY
MUST BE:
FUNGIBLE
One unit is viewed
as interchangeable
with another.
DURABLE
An item must be able
to withstand being
used repeatedly.
1
What happens if money
no longer holds its value?
2
ZIMBABWE
Where does money’s
value come from?
C
DIVISIBLE
Can be divided
into smaller units
of value.
LIMITED IN SUPPLY
The supply of money in
circulation ensures values
remain relatively constant.
UNIFORM
All versions of the same
denomination must have
the same purchasing power.
PORTABLE
Individuals can carry
money with them and
transfer it to others.
3
What happens if money supply is no longer limited?
UNITED STATES MONETARY BASE (IN BILLIONS)
$4,400
$4,000
$3,600
$3,200
$2,800
$2,400
$2,000
$1,600
$1,200
$800
$400
0
1985 1990 1995 2000 2005 2010 2015
4
What is the difference between money
and debt, and how much is there?
$7.6 trillion
All coins and banknotes
$97.5 trillion
World’s “Broad” Money
$233 trillion
Total Global Debt
SOURCES: FEDERAL RESERVE BANK OF ST. LOUIS, IMF
EVOLUTION OF MONEY 38

CURRENCY AND THE COLLAPSE
OF THE
ROMAN EMPIRE
The Roman Empire conquered much of the known Mediterranean world.
At its peak, the empire encompassed up to 130 million people over a span
of 1.5 million square miles, all connected by about 50,000 miles of road.
39

TRADE WAS VITAL TO ROME.
It allowed a wide variety of goods to be
imported into its borders and generated vast
wealth for its citizens. While the city of Rome
itself only had 1 million people, the Empire
grew rapidly – and the cost of maintaining
such a huge empire grew along with it.
BRITAIN
Roman Empire, 200 AD
Main trade route
Slave trade
Goods traded:
Grain Textiles
Marble Timber
Metals Wild animals
Olive oil Wine
ATLANTIC
OCEAN
GAUL
ITALY
BLACK SEA
Administrative, logistical, and military costs kept
adding up, and the Empire found creative new
ways to pay for things. Towards the end of its days,
the Roman Empire experienced hyperinflation, a
fractured economy, localization of trade, heavy
taxes, and a financial crisis.
SPAIN
MEDITTERRANEAN
SEA
SYRIA
MAURETANIA
EGYPT
AFRICA
CURRENCY DEBASEMENT WAS ONE OF
THE MAIN FACTORS THAT LED TO
THE ROMAN EMPIRE'S DEMISE.
SOURCE: ANCIENT.EUZ
EVOLUTION OF MONEY 40

ROMAN DEBASEMENT
The major coin used during the first 220 years
of the Empire was the Denarius – a silver coin
worth approximately one day’s wages for a skilled
laborer or craftsman.
At first, these coins were of high purity, holding
about 4.5 grams of pure silver. But soon the supply
of precious metals began to dwindle. Roman
spending was limited by the amount of denarii that
could be minted. This made financing the pet
projects of emperors challenging.
How was the latest war,
thermae, or palace
to be paid for?
SIMPLE. THEY
DECREASED THE
PURITY OF THE
COINAGE. IN DOING
SO, THEY WERE
ABLE TO MAKE
MORE “SILVER”
COINS WITH THE
SAME FACE VALUE.
90% SILVER 50% SILVER
41

With more coins in circulation, the Roman government found it could keep
spending. And the more it spent, the less silver each coin contained.
SILVER CONTENT OF A ROMAN DENARIUS
% of silver in a Roman denarius
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
64-68
161-168
193
Didus Julianus
219-222
Elagabulus
238
Pupienus & Balbinus
244
Philip
255-60
Valerian
268
Claudius II
75% X2
5%
By the time of Marcus Aurelius, the
denarius was only about 75% silver.
Caracalla tried a different method of
debasement. He introduced the “double
denarius”, which was worth 2x the
denarius in face value. However, it had
only the weight of 1.5 denarii.
By the time of Gallienus, the coins had
barely 5% silver. Each coin was a bronze
core with a thin coating of silver. The shine
quickly wore off to reveal the poor quality
underneath.
SOURCES: FOUNDATION FOR ECONOMIC EDUCATION
EVOLUTION OF MONEY 42

THE CONSEQUENCES
By 265 AD, there was only 0.5% silver left in a
denarius and prices skyrocketed 1,000% across
the Roman Empire. With soaring logistical and
administrative costs and no precious metals left to
plunder from enemies, the Romans levied higher
taxes against the people to sustain the empire.
“NOBODY SHOULD HAVE
ANY MONEY BUT I, SO THAT
I MAY BESTOW IT UPON
THE SOLDIERS.”
–Caracalla
who increased soldiers’ pay by 50% near 210 AD
Wages and Coinage
Soldiers demanded far higher wages as the
quality of coins diminished.
Silver content of coinage (%)
Wages of soldiers (Denarii)
90%
600
80%
70%
500
60%
400
50%
40%
30%
20%
10%
300
200
100
More coins were needed to pay for
goods and services and at times there
was runaway inflation. Wealth was
transferred away from the people and
the economy became paralyzed.
This trifecta of hyperinflation, soaring
taxes, and worthless money led to much
of Rome’s trade being dissolved. By the
end of the 3rd century, any trade that was
left was mostly local, using inefficient
barter methods instead of any meaningful
medium of exchange.
0 50
100 150 200 210
43
Years AD

THE COLLAPSE
During the “Crisis of the
Third Century” (235-284 AD),
a combination of invasion,
civil war, plague, and
economic depression
plunged the Roman Empire
into near collapse. Trade
networks were disintegrated
due to the dangers of
barbarian invasions.
429 VANDALS CROSS
FROM SPAIN TO AFRICA
406 VANDALS,
ALANS AND SUEBI
ENTER GAUL
SUEBI
ALANS
VANDALS
TRADE NETWORKS WERE
DISINTEGRATED
AND SUCH ACTIVITIES BECAME
TOO DANGEROUS.
HUNS CHECKED
BYGALLO- ROMAN
FORCES IN 451
GALLIA
CARTHAGE
439 CARTHAGE
FALLS TO VANDALS
402 WESTERN CAPITAL
MOVED TO RAVENNA
401-2 ALARIC’S
FIRST INVASION
ROME
OF ITALY
410 ALARIC
INVADES ITALY
AND SACKS ROME
395 HUNS
410 ALARIC
CONTEMPLATES
INVASION OF SICILY
AND AFRICA BUT
DIES OF ILLNESS
382 VISIGOTHS SETTLED
SOUTH OF DANUBE RIVER
UNDER TREATY
DANUBE RIVER
395-7 VISIGOTHS UNDER
ALARIC REBEL AND RAID
BALKANS AND GREECE
Roman Empire
Visigoths: 357-382
Visigoths: 395-410
Visigoths: 412-418
Vandals, Alan and Suebi: 406-411
Vandals: 429-439
Huns: 370-451
Battle
378 VISIGOTHS DEFEAT AND
KILL EMPEROR VALENS AT
BATTLE OF ADRIANOPLE
ASIA
370 HUNS
429-39 VANDALS CONQUER
NORTH AFRICA PROVINCES
AFRICA
BY 476 AD, THE WESTERN
ROMAN EMPIRE WOULD
CEASE TO EXIST.
SOURCES: FOUNDATION FOR ECONOMIC EDUCATION, SHORTHISTORY.ORG
EVOLUTION OF MONEY 44

The History of
CONSUMER CREDIT
Today, credit is everywhere and consumers rely on
it to buy many goods, from smartphones to homes.
While credit may seem like a modern invention,
it’s actually been around for at least 5,000 years.
45

3500 BC
Sumer
50 BC
Roman Republic
1787
England
Sumer is the first urban civilization with
about 89% of its population living in cities.
It is thought that consumer loans for
agricultural purposes are first used here.
Around this time, Cicero notes that
his neighbor bought 625 acres of
land for 11.5 million sesterces.
Cicero writes, “nomina facit,
negotium conficit” – or, “he uses
credit to complete the purchase.”
Philosopher Jeremy
Bentham writes a treatise
called "A Defense of Usury,"
arguing that restrictions on
interest rates harm the ability
to raise capital for innovation.
England 1826
1500
Age of Discovery
As European explorers and
merchants begin trade missions to
faraway lands, the need for capital
and credit increases.
The Manchester Guardian
Society is formed and later
begins issuing a monthly
newsletter with information
about people who fail to
pay their debts.
BC AD 1000
1800 BC
Babylon
1545
England
1803
England
The Code of Hammurabi
is written, formalizing the first known
laws around credit. Hammurabi
establishes the maximum interest
rates that can be used legally:
800
Dark Ages
The Church bans usury, the practice of
charging interest on loans, for all laymen
under Charlemagne’s rule (768-814 AD).
The first country to
establish a legal rate of interest is
England in 1545, during the reign of
Henry VIII. The rate is set at 10%.
A group of English tailors come
together to swap information about
customers who failed to settle their
debts. It is the earliest available
account of credit reporting.
On loans of grain,
the ceiling is
33.3% per year
“...lend, expecting
nothing in return”
10%
–Luke 6:35
On loans of silver,
the ceiling is
20% per year
SOURCES: QUANTUM FUTURE GROUP, AMSTRONG ECONOMICS, PERSEUS, THE GUARDIAN, THOUGH COMPANY,
UNIVERSITY OF TORONTO, NEW WORLD ENCYCLOPEDIA, DENVER POST, EXPERIAN
EVOLUTION OF MONEY 46

1864
New York
On the eve of the Civil War, R. G. Dun
and Company – formerly known as
The Mercantile Agency – establishes
an alphanumeric system for tracking
the creditworthiness of companies.
This system would remain in use until
the twentieth century.
$$$
1919
Detroit
General Motors creates the “installment
plan”, which allows regular families to
afford a new car with 35% down payment.
1950
USA
By 1950, the typical middle class American has
revolving credit accounts at different merchants.
Maintaining these different cards is
inconvenient and Diners Club is introduced –
the first multi-purpose charge card.
USA 1955
Early credit reporters use millions of
index cards, sorted in a massive filing
system, to keep track of consumers
around the country.
To get the latest information,
agencies scour local newspapers for
notices of arrests, promotions,
marriages, and deaths, attaching this
information to individual credit files.
1850 1900
1899
Atlanta
Retail Credit Company is founded and
begins compiling an extensive list of
creditworthy customers.
The company later changes its name to
Equifax. Today, Equifax is the oldest of the
three major credit agencies in the U.S.
USA1930
Efficient U.S. factories are
pumping out cheaper consumer
products and appliances.
Following the lead of GM, now
washing machines, furniture,
refrigerators, phonographs, and
radios can be bought on
installment plans.
USA 1958
BankAmericard (now Visa) is
“dropped” in Fresno, California.
American Express and
Mastercard soon follow,
offering Americans general
credit for a wide range of
purchases.
$$$ $ - $ - $ $ - $ - $
By this time 2/3 of all autos are
bought on installment plans.
47
SOURCES: TIME, AMERICAN RADIO WORKS, DINERS CLUB, PHILADELPHIA FED, BANK OF AMERICA

1960
USA
1970
USA
1989
USA
35%
Payment
History
30%
Amounts
Owed
At a time when the technology is
limited to filing cabinets, the postage
meter, and the telephone, American
credit bureaus issue 60 million
credit reports in a single year.
The first Fair Credit Reporting Act
is passed in the U.S. It establishes a
standard legal framework for credit
reporting agencies.
The FICO score is introduced, and
quickly becomes a standard system to
measure credit scores based on
objective factors and data.
It is still used by 90 of 100 of the
largest institutions in the U.S. to
assess credit risk.
10%
Credit Mix
15%
Length of Credit History
10%
New Credit
1960 2000
1964
USA
The Association of Credit Bureaus in the U.S.
conducts the first studies into the application
of computer technologies to credit reporting.
Accuracy of data is also improved around this
time by standardizing credit application forms.
1980s
USA
The three biggest credit bureaus attain
universal coverage across the country.
2006
USA
VantageScore is created through
a joint venture between the top
three credit scoring agencies.
Today
The Information Age
has enabled a new era
in consumer credit and
assessing risk. Today,
credit reports are used
to inform decisions
about housing,
employment,
insurance, and the
cost of utilities.
equifax
experian
transunion
SOURCES: BIAISE ET PAGANO, THE BALANCE, FIN WEB, MY FICO, VANTAGE SCORE
EVOLUTION OF MONEY 48

Silver
COMPARING THE WORLD’S
MONEY &
MARKETS
Millions, billions, and trillions…
how much money exists in the world?
Interestingly, what is considered “money”
depends on who you are asking. This visualization
simplifies the complex world of currencies, assets,
and other financial instruments.
The end result? A visually pleasing and
enlightening new way to understand the
vast universe of global assets.
How this
visualization works:
Each square
this size
is worth
$100 billion
Silver
The value of all
above-ground silver
stocks (estimated by
some at 1 billion oz) is
$17 billion using a
$17/oz spot price.
49

Cryptocurrency
50 Richest People Biggest Companies
California’s GDP
ALPHABET
APPLE
BITCOIN
ETHEREUM
THE REST
MICROSOFT
FACEBOOK
TENCENT
AMAZON
Cryptocurrency
Wealthiest People
Biggest Companies
California
The world’s fastest growing
asset class is cryptocurrency –
but even Bitcoin looks tiny in
the grand scheme of things,
when compared to other
global markets.
In aggregate, the world’s 50
richest people are worth a
hefty $1.9 trillion.
Apple is the world’s largest
public company by market
capitalization, worth $869
billion.
America’s most populous
state is also an economic
powerhouse with a GDP of
$2.7 trillion. That eclipses the
economies of most countries.
GATES BEZOS BUFFETT
$90B $112B $84B
SOURCES: MACROTRENDS, COINMARKETCAP (CRYPTOCURRENCY: LAST WEEK OF DEC 2017), FORBES, BEA (CALIFORNIA GDP 2017 Q2)
EVOLUTION OF MONEY 50

Fed’s Balance Sheet
Gold
Stock Markets
21%
PRIVATE
INVESTMENT
UNITED KINGDOM
UNITED STATES
JAPAN
CHINA
$3.5T
14%
OTHER
48%
JEWELRY
EURO AREA
Added During QE
CENTRAL
BANKS & IMF
17%
REST OF THE WORLD
51
Federal Reserve
Balance Sheet
Between 2008 and 2014, the
Fed’s balance sheet jumped to
$4.5 trillion from $1 trillion due
to controversial quantitative
easing (QE) programs.
The World’s Gold
The world’s total above-ground gold
reserves are estimated at 187,200 tonnes
by the World Gold Council.
Using a $1,275/oz spot price, the world’s
gold is worth $7.7 trillion.
SOURCES: FEDERAL RESERVE, WORLD GOLD
COUNCIL, WFE, CIA, IIF, INVESTOPEDIA
The World’s Stock Markets
The market capitalization of all of the world’s
stock markets is equal to $73 trillion.
38%
29%
REST OF
THE WORLD
5%
11%
7%
10%

Global Money Supply
Global Debt
8% 92%
Physical
Non-Physical
Global
Money
Supply
The total value of the world’s money is
$90.4 trillion. This includes coins, banknotes,
money market accounts, as well as saving,
checking, and time deposits.
Global
Debt
This is the total amount of debt, including that
accumulated by governments, corporations, and
households. Together, it adds to $233 trillion,
which is 318% of global GDP.
EVOLUTION OF MONEY 52

Derivatives
The low end estimate of the size and scope
of global derivative markets is $544 trillion
on a notional contract basis.
The high end estimate (not shown here) for
the value of all derivative contracts is as high
as $1.2 quadrillion. The truth is that no one
really knows the exact size of the market.
The positives are derivatives can be used to help
allocate and take price risk out of everything from corn
to cattle to stock. There are good derivatives that are
self-regulating such as interest rate swaps and currency
forwards. I’ve been working for exchanges for 41 years. I
do not think regulation is incompatible with an efficient
market. I think derivatives promote efficiencies.
–Dr. Richard Sandor
Mixed views on derivatives
Many finance professionals consider
derivatives to be “zero-sum” trades.
in other words, there is a winner and
loser on each side of the bet.
However, other experts warn that the
massive size of the derivatives market
could pose significant risk to global markets.
The derivatives genie is now well out of the bottle, and
these instruments will almost certainly multiply in variety
and number until some event makes their toxicity clear.
Central banks and governments have so far found no
effective way to control, or even monitor, the risks posed
by these contracts. In my view, derivatives are financial
weapons of mass destruction, carrying dangers that,
while now latent, are potentially lethal.
–Warren Buffett
WHAT’S A DERIVATIVE?
A derivative is a contract between two or
more parties that derives its value from
the performance of an underlying asset,
index, or entity.
Examples of derivatives
• Futures contracts
• Forward contracts
• Options
• Warrants
• Swaps
If there were no derivatives, there would be no
bank loans at all today, because people want to
get fixed-rate 30-year loans, but banks don't want
to keep 30-year loans on their books.
–Jeff Greene
EVOLUTION OF MONEY 54

UNITED STATES
In nominal terms, the U.S. leads the world
with roughly $20 trillion of government debt.
JAPAN
Japan has a sky-high 239%
debt-to-GDP, but over 90% of
this debt is held domestically.
SHARE OF GLOBAL DEBT: 31.8%
18.8%
ITALY
FRANCE
GERMANY
UNITED
KINGDOM
INDIA
CAN
3.9%
3.8%
3.8%
3.7%
2.5%
2.3%
SPAIN
MEXICO
KOREA
AUSTRALIA
BELGIUM
NETHERLANDS
GREECE
ARGENTINA
SWITZ.
SINGAPORE
EGYPT
2.0%
1.0%
0.9%
0.8% 0.8%
0.8%
0.6% 0.5% 0.5%
0.5%
0.5%
POLAND
TURKEY
IRELAND
SWEDEN
RUSSIA
ISRAEL
TAIWAN
PAKISTAN
THAILAND
MALAYSIA
S. AFRICA
FINLAND
COLOMBIA
IRAN
NORWAY VIETNAM DENMARK IRAQ
0.4%
0.4%
0.4%
0.3%
0.3%
0.3%
0.3%
0.3%
0.3%
0.3%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%

How much government debt exists?
According to 2016 IMF estimates, governments have accumulated $63 trillion
in total debt. The U.S. alone makes up almost a third of that amount.
CHINA
200%+
175%
7.9%
REST OF WORLD
How to read
this chart
Size
Share of Global Debt
COUNTRY
NAME
2.5%
Color
Debt as a Percentage of National GDP
150%
125%
100%
3.6%
75%
50%
ADA
2.2%
BRAZIL
The IMF warns that if Greece continues
at its current pace, debt-to-GDP will hit
a whopping 275% by 2060.
25%
0%
AUSTRIA INDONESIA PORTUGAL
0.5% 0.4% 0.4%
Lebanon, perhaps surprisingly,
has the third highest debt-to-GDP
ratio in the world, at 149%.
SAUDI
PHIL. UAE QATAR
ARABIA
0.2% 0.1% 0.1% 0.1% 0.1%
LEBANON
SOURCE: IMF
EVOLUTION OF MONEY 56

THE
GLOBAL WAR
ON
CASH
There is a global push by lawmakers to eliminate the use of physical cash around the world. This
movement is often referred to as "the war on cash", and there are three major players involved:
THE INITIATORS
THE CROSSFIRE
THE ENEMY
WHO?
Governments, central banks
WHO?
Citizens
WHO?
Criminals, terrorists
WHY?
The elimination of cash will make it
easier to track all types of transactions,
including those made by criminals.
WHY?
The coercive elimination of physical
cash will have potential repercussions
on the economy and social liberties.
WHY?
Large denominations of bank notes
make illegal transactions easier to
perform, while increasing anonymity.
HOW DID THIS PUSH TOWARDS A CASHLESS SOCIETY START, AND COULD IT BACKFIRE?
57

Since the late 1990s, technology has
made non-cash transactions more
viable. By 2015, there were 433 billion
cashless transactions worldwide.
282
BILLION
2010
433
BILLION
2015
TODAY, THERE ARE MULTIPLE WAYS TO PAY DIGITALLY, INCLUDING:
INTERMEDIARIES
PayPal, Square
ONLINE BANKING
Visa, Mastercard, instant bank transfers
SMARTPHONES
Apple Pay
CRYPTOCURRENCIES
Bitcoin
SOURCES: CAPGEMINI, BNP PARIBAS
EVOLUTION OF MONEY 58

THE FIRST SHOTS FIRED
The success of these new technologies has prompted lawmakers
to question whether all transactions should now be digital.
Here is their case for a cashless society:
2
More traceable money
results in higher tax revenues.
All cashless transactions would
require a third party.
1
Removing high denominations of
bills from circulation makes
it harder for terrorists,
drug dealers, money
launderers, and
tax evaders.
$1 million in $100 bills weighs
only 22 lbs (10 kilograms).
Criminals move $2 trillion
around the world each year.
The U.S. $100 bill is the most
popular note in the world, with
11.5 billion of them in circulation.
This gives regulators more
control over the economy.
3
Central banks can dictate interest
rates that encourage (or discourage)
spending to try to manage inflation.
Banks incur fewer costs
by not having to handle cash.
It also makes compliance
and reporting easier.
Lawmakers say that cash, especially large
denomination bills, must be eliminated.
Cashless transactions are
faster and more efficient.
The “burden” of cash can be
up to 1.5% of GDP, according
to some experts.
Yet, cash is still used for about
85% of all transactions worldwide.
59
SOURCES: FEDERAL RESERVE, UNODC

DECLARATION OF WAR
Governments and central banks are moving
swiftly in some countries to eliminate cash:
NORWAY
SWEDEN
Banks have started
removing ATMs from
rural areas.
SOUTH KOREA
Aims to eliminate paper
money entirely by 2020.
SINGAPORE
AUSTRALIA
A 2016 UBS report
recommended a ban
on the $100 bill.
DNB, Norway’s biggest
bank, proposed a ban
on cash in 2016.
Eliminated the $10,000 note
(its highest note) in 2014.
USA
Policymakers are pushing to
abolish $50 and $100 notes.
VENEZUELA
The Venezuelan government launched
an oil-backed token in 2018, used to pay
for taxes, fees, and other public services.
FRANCE
Considering banning cash for
transactions over €1,000.
EUROPE
The European Central Bank
has stopped producing new
€500 notes, over concerns that
they facilitate illicit activities.
GREECE
Citizens must now declare
all cash over €15,000
held in safes or other
non-bank storage.
INDIA
In 2016, Indian Prime Minister
Narendra Modi demonetized
500 and 1,000 rupee notes.
Overnight, this eliminated
86% of the country’s notes.
People could theoretically
exchange 500 and 1,000 rupee
notes for higher denominations,
up to a limit of 4,000/person.
Sums higher than 4,000 had to
be routed through a bank
account – yet only 50% of
people have bank accounts.
SOURCES: FORBES, THE GUARDIAN, ZERO HEDGE, VERDICT
EVOLUTION OF MONEY 60

CAUGHT IN THE CROSSFIRE
The shots fired by governments fighting the war on
cash may have several unintended casualties.
1 01
Cashless transactions would always
include some intermediary or third party.
03
Certain types of transactions (e.g. gambling)
could be barred or frozen by governments.
PRIVACY
02
Increased government access to personal
transactions and records.
04
Decentralized cryptocurrency could be an
alternative for such transactions.
Savers could no longer have the
individual freedom to store wealth
“outside” the system.
Eliminating cash makes negative
interest rates policy (NIRP) a
feasible option for policymakers.
01
02
A cashless society also means all
savers would be “on the hook” for
bank bail-in scenarios.
Savers would have limited abilities to
react to extreme monetary events like
deflation or inflation.
03
04
2
SAVINGS
3
HUMAN RIGHTS
01
02
Rapid demonetization has violated people’s
rights to life and food.
In India, removing the 500 and 1,000
rupee notes caused multiple human
tragedies - with unaffordable food,
disrupted freedom of movement, and
patients being denied treatment.
03
Demonetization also hurts people
and small businesses that make their
livelihoods in the informal sectors of
the economy.
61

With all wealth stored digitally,
the potential risk and impact of
cybercrime increases.
Hacking or identity theft could
destroy entire life savings.
01
02
Cybercrime is already expected
to cost the global economy over
$6 trillion by 2021, according to
Cybersecurity Ventures.
03
4
CYBERSECURITY
AS THE WAR ON CASH ACCELERATES,
MANY SHOTS WILL BE FIRED.
WHO WILL TAKE THE
MAJORITY OF THE DAMAGE?
SOURCE: CYBERSECURITY VENTURES
EVOLUTION OF MONEY 62

M. NAMESON 12 / 25
Disrupting
M. NAMESON 12 / 25
Payments
The current payments landscape is
moving at a blistering pace.
Today’s technology allows for payments
to be faster, cheaper, and decentralized.
In just a couple of decades, coins, paper
money, and plastic cards are being
rendered archaic relics of the past.
Digital payments are taking over.
The ubiquity of smartphone ownership, combined with
these disruptive technologies, make mobile payments
one of the quickest growing markets in existence.
Mobile Payments Market (Global)
$2,849B
$3,000B
Many technologies are still emerging to reach their full potential
CAGR*
39.2%
$2,500B
$2,000B
$1,500B
$1,000B
P2P payments
Blockchain
Near-field
communication
Facial recognition
$392B
2014 2020E
$500B
$0
*Compound Annual Growth Rate
63
SOURCE: FUTURE MARKET INSIGHTS

To see the potential of payment
markets, just look at China:
China’s third party internet payment market was
estimated at RMB 19.2 trillion ($2.4T) in 2016,
with a year-on-year growth rate of 62.2%
according to iResearch.
The up and coming alternative payments market
is growing at an astonishing speed, providing
many opportunities for investors.
China
USD $2.4tr
62.2%
YOY Growth
Cryptocurrencies are a key example, having already soared
past a total market capitalization of over $600 billion.
Bitcoin Ethereum Bitcoin Cash
1,000+ other
currencies
$234B
$266B
$75B $42B
SOURCES: RESEARCH, COINMARKETCAP (DEC 31, 2017)
EVOLUTION OF MONEY 64

Cryptocurrency experienced a breakthrough year
in 2017. Bitcoin skyrocketed 10x in value, breaking
the $10,000 psychological barrier. Here is its
journey to that landmark valuation.
JANUARY
China cracks down on
Bitcoin, partly to control capital
outflows – transactions over
50,000 yuan must be reported
MARCH
The number of GitHub
projects related to
Bitcoin passes 10,000
2017 was the year the ICO
went mainstream as a funding
mechanism. Cumulatively,
$5.7 billion was raised by ICOs.
According to a 2017 report by
Mangrove Capital Partners, the
average return of 204 ICOs
sampled was 1,320%.
BITCOIN PRICE
(USD)
2017
JAN
FEB
MAR
APR
95%
95% of all ICO funding
(all time) was raised in 2017.
Over $1.4 billion was raised in
ICOs in December 2017 alone.
ICO FUNDING
(MILLIONS)
$2.32
$17.00 $19.42
$103.74
All previous ICOs
$294.8
65

MARKET CAP
$25B $50B $100B
MILESTONES
MAY 4
138 days
$1,000 to $2,000
AUGUST 1
Bitcoin forks into two digital
currencies, Bitcoin (BTC)
and Bitcoin Cash (BCH)
A hard fork is when a cryptocurrency’s
code is altered, resulting in an old and
new version (i.e. two currencies)
23 days
$2,000 to $3,000
SEPTEMBER 4
People’s Bank of China
announces a freeze
on ICO funding
AUGUST 5
63 days
$3,000 to $4,000
SEPTEMBER 12
JP Morgan’s
Jamie Dimon calls
Bitcoin a “fraud”
SEPTEMBER 8
It’s leaked that China is
shutting down all Bitcoin
exchanges in the country
SEPTEMBER 28
South Korea bans
raising money
through ICOs
OCTOBER 20
61 days
$4,000 to $5,000
10 days
$5,000 to $6,000
OCTOBER 24
Bitcoin
Gold fork
13 days
$6,000 to $7,000
OCTOBER 30
Vietnam bans
Bitcoin and other
crypto payments
2 days
$9,000 to $10,000
7 days
$8,000 to $9,000
17 days
$7,000 to $8,000
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
Between January 1 and
December 31, 2017, Bitcoin’s
market capitalization surged
14x to reach a whopping
$220 billion. It remains to be
seen whether cryptocurrency
can reach mainstream
adoption, or whether it is a
speculative bubble ready to
burst. One thing is for certain:
investors all over the world
are watching closely.
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
$232.04 $462.03 $574.78 $134.15 $607.49 $947.96 $840.94 $1,442.09
SOURCES: COINDESK, COINMARKETCAP, MANGROVE CAPITAL PARTNERS
EVOLUTION OF MONEY 66