Eighteenth Century Bitcoin

Or everything old is new again

Richard Arkwright (1732 – 1792) was a Steve Jobs for his times, and one who also organized a type of Bitcoin currency for making transactions. He died 32 years before my grandfather was born, which is of no import except to show that all this happened not that long ago.

The eighteenth century industrial revolution was powered by water and the steam engine, both of which substituted for manual labour and horse power. Before the introduction of railroads, canals were a means used to ship products. Canals had a short life span but some survive and are used mainly for tourism today in the UK.

Arkwright, one of a family of thirteen children was, for financial reasons, home schooled, and first apprenticed to a barber and wigmaker. His main inventions were cotton related. He developed the spinning frame and carding engine, which reduced the labour required to spin raw cotton for making cloth. For the 18th century these developments were as significant in their way as the information age is today in other areas.

The modern factory system was a product of these earlier times. Workers were brought to his factories from other parts of the country ,

“Richard Arkwright’s employees worked from six in the morning to seven at night. Although some of the factory owners employed children as young as five, Arkwright’s policy was to wait until they reached the age of six. Two-thirds of Arkwright’s 1,900 workers were children. Like most factory owners, Arkwright was unwilling to employ people over the age of forty.”  See http://www.spartacus.schoolnet.co.uk/IRarkwright.htm

Too ensure a steady supply of labour, Arkwright built housing close to his factories so that workers would be on site and on time for work. He also owned stores nearby which supplied the workers and reduced the time needed for travel. These stores became was another revenue source, and this is where an eighteenth century version of Bitcoin enters the picture.

Arkwright was keen that his workers and their families would spend their earnings on things he owned, so he provided a currency specifically for this purpose.  In fact this was the only currency which was acceptable in his stores. Unlike today’s Bitcoin, it was a tangible currency using Spanish silver coins, but these were stamped to show both their value in exchange, and the fact that they could be, and had to be, used in the company stores.

An example of a coin can be seen at http://www.massonmills.co.uk/News/Wins-Silver-2006.html.php

Printed on these Spanish coins by the mill owner are the words “Cromford, Derbyshire and 4/9”. Cromford is where the mill was located, and 4/9 denotes four shillings and nine pence which is what the coin was worth for transaction purposes, although its silver value must have fluctuated over time, creating problems when it exceeded its face value.

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