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IPFS News Link • Gold and Silver

A 1,000+ Year Old Idea is the Latest Cryptocurrency Trend

• by Simon Black

The palace was a gift from King Baldwin II, who ruled the Kingdom of Jerusalem, carved from lands conquered by the Catholics in the First Crusade two decades earlier.

Hugh of Payns' brotherhood would become an elite force of warrior monks sworn to defend the Holy Land. And because their first headquarters was referred to as the Temple of Solomon, they became known as the Knights Templar.

Expanding throughout Europe and the Middle East, the Knights Templar's castles and convents became known for impenetrable security. Along with the order's reputation for honesty accountability, this made these fortresses the perfect place to house valuables such as important documents, jewels, and gold.

By 1150, a Second Crusade was underway, and Catholic knights were swarming into the Holy Land to fight the Seljuk Turks.

Wars are expensive, and the crusaders needed to bring the wealth to fund their campaigns.

But that posed a problem. The journey to the Jerusalem was long and uncertain, and carrying vast treasures made crusaders a target of thieves.

So the Knights Templar created a solution. Crusaders could deposit their gold in a Templar castle near home, and receive a letter of credit. This letter of credit was good to withdraw the same amount of gold at any other Templar branch.

And to secure their letters of credit against forgery, the Knights Templar developed a coded writing which could only be deciphered by other Knights Templar.

These encrypted, gold-backed letters of credit were essentially a very early form of gold tokenization.