One of the things Renee and I have talked about is turning the podcast topics into a book that follows some common themes. It’s not much more than an outline with some ideas right now. But I have been working on a chapter about trust. So, this excerpt is from that chapter.

If you’re a fan of the podcast, you know that Renee and I believe history does repeat. Human nature doesn’t change, and the “change” we see comes from the change in scope, speed, reach, scale, etc. And the adoption of technology might change that reach, but the need doesn’t change.

So, I hope you enjoy this little excerpt.

Chapter 4: The Oldest Product

From History Repeats Itself. It Repeats Itself. It Repeats Itself.

I have a special love for the British Museum. When I first moved to the UK, I lived about 5 minutes away from the museum and would spend time there on the weekends. So I got to know where crowds congregated. There’s a room in the British Museum that almost nobody visits. Room 68. The Citi Money Gallery. It’s tucked away on the upper floor, past the Egyptian mummies and all the things Britain borrowed from other countries. My kids roll their eyes when I suggest a visit. Friends politely redirect toward the Rosetta Stone or the Assyrian Rooms. I’m happy to go to the Assyrian Rooms too. I’ve given impromptu tours in there a few times. Ok, more than a few times. But back in the, what I call the, “Money Room,” I’ve taken selfies. I’ve taken pictures of the payment tokens and cards and coins. I’ve contemplated the secrets of value exchange. I even once photographed a credit card in one of the exhibits and noticed the museum hadn’t blanked out the card strip. The British Museum wasn’t PCI compliant. Only my security friends have laughed. The museum has since “masked” the card numbers.

The room is full of glass cases. Coins, banknotes, clay fragments, bronze shapes. Every era, every continent. I love this room because each object is a tiny monument to the same human problem: how do you prove you’ll pay someone back?

That question is the oldest product in the world. Older than agriculture, older than writing, older than cities. Before anyone minted a coin or printed a note, Mesopotamian merchants scratched IOUs for grain and silver into wet clay tablets. These were the world’s first ledgers. You didn’t need to witness the trade. The tablet was the proof. Bricks and clay don’t last forever, but we still have some of these tablets from four thousand years ago. The permanence of a transaction, carved into mud.

Renee said it on the podcast and she was right. Excel isn’t new. Excel was on a clay tablet once.

A few thousand years later, medieval England refined the idea with tally sticks. Take a length of hazelwood. Carve notches across it to represent amounts owed. Then split the stick down the middle. The lender kept one half, called the stock. The debtor kept the other, called the foil. When the debt was settled, you matched the halves. The grain of the wood was unique. You couldn’t forge it. If the notches lined up and the wood grain matched, the transaction tallied. That’s where the word comes from. And the word “stockholder.” Same origin. A person who held the stock half of a split stick.

The system worked so well that the English Exchequer used it for six hundred years. Tally sticks recorded tax debts from the reign of Henry I until 1826, when Parliament finally retired them in favour of paper ledgers. In October 1834, someone decided to dispose of the accumulated centuries of old sticks by burning them in the basement stoves of the House of Lords. The fire got out of control. It destroyed both the House of Lords and the House of Commons. The most important financial record-keeping system in English history ended by accidentally burning down the seat of English government. Turner painted the fire from across the Thames. It’s in the Cleveland Museum of Art.

Around 600 BCE, the Lydians in western Anatolia started stamping lumps of electrum, a gold and silver alloy, with the king’s seal. For the first time, the value of a payment rested on who guaranteed the metal in your hand. The king’s face on the coin did the same job a blue verification badge does today. It said: this is authentic, backed by an authority you recognise. You could trade with strangers and trust the metal because you trusted the stamp.

Renee made that connection, the king’s seal and the blue check, and I think about it every time I see a verified account. The mechanism is identical. A mark from a recognised authority, applied to something that would otherwise be unverifiable. The technology changed from metal to pixels, but, importantly, the human need didn’t move an inch.

The Chinese were minting bronze shapes around the same period. Spade money and knife money, little bronze simulacra that represented value. A few hundred years later, the Qin dynasty standardised round coins with square holes so you could string them together. And then, under the Song dynasty, China invented paper notes. Lighter, faster, and easier to fake. But still the same promise underneath. I owe you, backed by someone you believe in.

Every one of these transitions required people to accept something they couldn’t independently verify. Clay tablets worked because you trusted the merchant. Tally sticks worked because you trusted the wood grain. Coins worked because you trusted the king. Paper worked because you trusted the bank. The objects changed throughout time, but there was always at least a tiny leap of faith involved.

Then, in Renaissance Italy, a Franciscan friar named Luca Pacioli codified something that might be the most consequential technical innovation in the history of money. Nay, the history of humanity! I’m going to stand by that claim. Double-entry bookkeeping. He published it in 1494 in a treatise called Summa de Arithmetica. The concept is simple. Every debit has a corresponding credit. If one side doesn’t balance, the system tells you. For thousands of years before Pacioli, equivalent value transfer was implied.

Once you could trust the books, you could trust the trade, even across oceans. The Venetian trade empires, the Dutch East India Company, the entire architecture of global finance. All of it rests on Pacioli’s insight that when value leaves one place, it has to arrive somewhere else. Every bank on earth today keeps score the same way. Blockchain, core banking platforms, central bank digital currencies. They’re all variations on the system a 15th-century friar wrote down in a maths textbook.

Clay, wood, metal, paper, ink, code. All my favourite things in Room 68. The material keeps changing, but the product never does. The product is trust. Every transaction system, every authentication protocol, every currency ever created is a trust product. The question “how do you prove you’ll pay someone back?” just keeps getting asked at higher speed, at wider scope, and at deeper reach.

Which brings us to the part of this story where trust breaks.

In 2011, RSA’s SecurID token was the gold standard of two-factor authentication. Forty million hardware tokens deployed worldwide. Banks, defence contractors, government agencies. Every one of them trusting the same seed database, the cryptographic core that generated those six-digit codes cycling every sixty seconds on the little fobs clipped to lanyards in every secure facility in the Western world.

One employee in RSA’s HR department opened one email. Inside was a spreadsheet. They double-clicked it. That was it. Spear phishing. The seed database was compromised. The blast radius of the click was global.

The pattern is ancient. A castle with one gate. A vault with one key. A civilisation’s trust in a single point of failure.

---

This is an excerpt from a chapter in progress. The book continues with RSA’s remarkable crisis response, the economics of blue box telephone fraud, and the thread connecting Steve Jobs, SIM swap attacks, and a 2,600 Hz tone to the same human vulnerability that’s existed since someone first carved an IOU into wet clay.