500 years ago the inhabitants of the tiny Micronesian island of Yap used a currency system which anthropologists have discovered had striking similarities to the foundations of Bitcoin.
On Yap Island, remenants remain of giant limestone disks which were the basis of the region’s monetary system from around 1400 AD, to the end of the 19th century.
Yapese islanders travelled to the nearby island of Palau to quarry the stone money disks, known as ‘Rai’.
They were then transported back to Yap using canoes and rafts. But because the disks were so heavy and fragile, once they were in place on the island they couldn’t be moved.
The world’s first distributed ledger-based currency
Despite remaining in a single position perpetually, the Rai stones were exchanged between islanders regularly. So, to track ownership a community-based oral ledger was developed.
Island chiefs would announce Rai ownership changes at community gatherings, ensuring as many inhabitants as possible knew about the transaction and reached an ‘ownership consensus’.
This week, anthropologists Scott Fitzpatrick and Stephen Mckeon published a research paper on the island’s ‘oral ledger system’ outlining similarities between the ancient system and the blockchain technology foundations of Bitcoin.
“Perhaps the most striking similarity between Bitcoin and Rai is the use of a distributed ledger for records of ownership… This is the blockchain ledger in the Bitcoin network, and an oral ledger shared among all villagers in Yap.” wrote Fitzpatrick and Mckeon.
“Within the Bitcoin network, “nodes” keep a copy of the ledger, validating and relaying new transactions.
“An ancient corollary to nodes in the Bitcoin network are the villagers of Yap… They confirmed and repeated information about the transactions of Rai stones through an oral ledger, preventing double‐spending.”
Did the Yapese inspire Satoshi Nakamoto?
While we may never know, it’s an extraordinary suggestion made by Fitzpatrick and Mckeon in their paper, published by the American Anthropological Association.
“While cryptocurrencies and blockchain technology may seem to be more recent innovations, the premise behind them is rooted in the ancient past, which involved the production, movement, and use of traditional forms of currency, the most visible and prominent of which were the famous stone money of Yap,” they wrote.
“The manufacturing and value of both Bitcoin and Rai were predicated on many of the same principles, and we argue that the latter may have been an inspiration for the former.”