The dollar. It is the world’s trade currency and one of the most valuable currencies on the planet, backed by a large surplus of paper money. However, with the rise of new technologies, you hardly even see real paper dollars being used throughout the US for everyday transactions. In this article we will examine how the value of the paper currency has changed over time and what that means for its purchasing power.

The origins of the dollar trace back to 1792 when if officially came into effect via the Coinage Act of 1792. This differentiated the US currency from other currencies in the world and help define our economic system.

The US dollar’s value originally was back by the Gold Standard. This meant that paper money was tied to gold reserves, allowing people to exchange their bills for a metal currency of high value. However, the US abonnded this standard in 1971, meaning the government directly backed the dollar. This meant that supply, demand, and the US’ geopolitical stance was directly responsible for the value of the dollar.

Nowadays, paper money has seen a dramatic decline in it’s societal value. This is due to a plethora of factors including the rise of digital payment, cryptocurrencies, and more. In fact, some countries area already opening Central Digital Currency Banks, which indirectly shows their stance on the demolition of paper currency.

Currency has undoubtedly been one of the most important inventions in the history of mankind as it provides a financial backing and allows for economic growth. Throughout history, this currency has usually been in the form of paper, metal, or other materials. However,  in recent years, this has changed dramatically as paper currencies like the dollar are rapidly being replaced due to new digital payment methods and the arising of digital currencies.