The Yapese, who lived on a tiny island in the Western Pacific located between Guam and Philippines called Yap, used the Rai of Yap as their currency dating 1,500 years ago.
It has some similarity with Bitcoin and altcoins of today. Understanding them can help further understanding of cryptocurrencies.
While many communities chose to use seashells and fish scales as a medium of exchange, Yap locates in the middle of the Coral Triangle where these are in plenty of supply. Since money has to have some scarcity and limited in supply, sea shells and fish scales did not fit the agenda as they were easy to get by everybody there.
They later discovered, during their expeditions, that a neighboring island hundreds of miles away had limestone that they did not have. Limestone requires a huge amount of work to bring back to Yap, was scarce and limits in supply.
To bring it back, one had to use rafts and canoes that weren’t as improved. Besides, one requiring muscle power and navigational skills to manage that.
Another problem was the weight. Although some were reasonably sized, some weighed more than four tones, making it hard or impossible to ship to Yap. These could be inconvenient to carry around, as with something people regard as a medium of exchange.
But Yapese did not leave it at that. They still retained limestone as their medium of exchange. For stones that could not be moving, they discovered that they could still change ownership through public declaration and consensus. If people agreeing that the stone had change in ownership, it does not matter where it was located.
One legendary stone that sunk to the bottom of the sea in a typhoon also remained a representation of wealth after survivors and sailors testified to the community that it was indeed real and extraordinary in size.
Like the Rai, cryptocurrencies require hard work to mine and attain through Proof of Work (POW) — which requires much electricity and computational power just like the limestone for Yapese that required muscle power and navigational skills. Although again, Proof of Stake makes work easier one would say. But cryptocurrencies still require a huge amount of tech skills and knowledge to have and manage.
Likewise, cryptocurrencies are managing on a public ledger governing by consensus. Once people agree who owns cryptocurrencies and when they change hands on the public ledger, then it does not matter where they are storing.
Cryptocurrencies are hard to get and therefore have qualities of money. One also does not require moving them around, like the huge stones. Although the reasons for portability, this time are completely different.