As complex and prestigious as modern finance and international banking have become, their early beginnings served a far more human and practical purpose. The principles that govern today’s futures markets, options, and global trade are not modern inventions — they are deeply rooted in ancient civilization.
Long before Wall Street or the Chicago Board of Trade, early societies were already engaging in sophisticated forms of risk transfer, speculative pricing, and contract-based trade, especially in agriculture, where the unpredictability of nature demanded foresight, cooperation, and trust-based systems to manage future outcomes.
One of the earliest examples of early finance appears in Genesis 41, where a Pharaoh of Egypt dreams of seven years of abundance followed by seven years of famine. Joseph interprets the vision and responds with an early-stage state-run commodity strategy: 20% tax during the good years, stored for sale during the famine. Egypt not only survives but also profits, exporting grains to neighboring nations. This biblical story encapsulates the very logic of commodity speculation and reserves management. Other early financial innovations appear in the Code of Hammurabi (c.1750 BCE), which documents contracts for future delivery at agreed-upon prices, one of the world’s earliest futures and options agreements. These legally binding contracts were stored in temples, making Mesopotamian religious centers early versions of modern clearinghouses.
In ancient Greece, Aristotle tells the story of Thales, a philosopher who secured exclusive rights to olive presses in anticipation of a bountiful harvest, profiting like an early options trader. Similarly, Ancient Rome used forward contracts in grain markets, along with maritime loans (foenus nauticum) and a network of argentarii (bankers), offering deposits, loans, and credit in marketplaces. The Phoenicians, masters of Mediterranean trade, pioneered joint-risk maritime ventures — early forms of equity investment and shared-risk finance — enabling merchants to pool capital for shipping expeditions and split profits or losses. These networks formed the building blocks of today’s banking, insurance, and structured finance.
From Mesopotamia to Egypt, Greece, Rome, and Phoenicia, humanity has continually developed ways to extract value from time, trust, and risk. Agriculture — with its seasonal cycles, long timelines, and inherent uncertainty — became the crucible of financial innovation. The principles birthed in ancient technologies still power today’s futures markets, derivatives, and asset management systems, though their spiritual and practical origins are often forgotten.
Code of Hammurabi. Photo by Richard Patterson / Flickr, CC BY-NC-SA 2.0Templar Banking and International Trade Networks
Anthropology teaches us that at the beginning of known human history, ancient cultures operated upon what is known as a “gift economy”. In this system, goods and services were given in a system of reciprocal exchange governed by social norms and customs. This non-market exchange was made possible by deeply ingrained social customs.
The sovereign institution of the legendary Knights Templar, under the Order of the Temple of Solomon, operated its own sovereign economy. This economy was said to be by and for the people and was powered by an egalitarian system of meritocracy. The Medieval Knights Templar’s purpose was to restore the ancient spiritual economy of merit coins in a favor system of chivalry for the purpose of empowering the People to reclaim Common Law human rights against abuses of power. The Templars were more than warrior monks, they were pioneers of a spiritual financial system rooted not just in gold, but in morality, trust, and honor.
The Templars pioneered one of the most advanced and secure transcontinental financial networks in medieval history, thanks to a powerful concept: the moral currency system. Religious coins were created as a symbolic token of moral merit, representing acts of chivalry, spiritual service, and righteous conduct. Unlike secular coinage used for taxation and commercial trade, these coins were not defined by a fixed monetary value, but earned their worth within a closed, trusted spiritual economy. Each coin symbolized a favor granted, earned or owed which enabled a non-monetary exchange of privileges, exclusive access, and protection, especially for pilgrims and believers.
In order to support this moral economy and fulfill their mission of protecting pilgrims, the Templars established an early form of secure, international banking infrastructure. Depository outposts (fortified monasteries) were built across Europe and the holy land that doubled as financial hubs. Pilgrims could deposit funds in London or Paris, receive a letter of credit, and redeem it in Jerusalem, avoiding the dangers of carrying physical wealth throughout lawless territory. These outposts acted as trust nodes, offering vaulted security, asset custody, and transaction records. The network became so reliable that European monarchs and Popes entrusted the Templars with their treasuries, funding wards, crusades, and church operations throughout their system.
The Templars innovations laid the groundwork of modern banking including letters of credit: prefigured modern check and promissory notes, encrypted communications: used ciphers based on the Maltese cross to transmit sensitive information between branches, dual-ledger systems: managed deposits, withdrawals, and obligations across multiple territories, and asset segregation and vault security: their network of fortified temples functioned as secured vaults for nobles, pilgrims, and institutions. The Templars system showed that value could be rooted in conduct and honor, not just state-backed money.
Source: USA Knights TemplarHedge Funds Beginnings and Private Networks of Financial Communications
In parallel to the creation of these modern spot and futures markets in the mid-20th century, a new class of financial enterprise began to emerge – one that would reshape investment strategy and global capital flows. Thanks to the technological evolution of markets and the increasing demand for performance beyond traditional benchmarks, the concept of alternative investments took form in what we now call hedge funds.In 1949, Alfred Winslow Jones, a financial journalist and sociologist, created what is widely regarded as the first hedge fund. His pioneering strategy aimed to hedge market risk by combining long positions (stocks expected to rise) with short positions (stocks expected to fall), effectively pursuing a market-neutral return. He also employed leverage — borrowing capital to amplify gains — and introduced a revolutionary compensation model in which fund managers earned 20% of the profits, a structure that remains the industry norm today. Jones’s approach signaled a turning point: traditional banking and investment paradigms were being challenged, and a new, more dynamic class of capital allocators was emerging — one that aimed to profit in any market condition, and ultimately laid the foundation for modern asset management and financial innovation.
By the 1960’s, hedge funds began attracting serious attention from wealthy individuals and institutional investors. No longer confined to equity markets, fund managers expanded into commodities, fixed income, and foreign exchange(forex), experimenting with diversified strategies that had never been seen before. This marked the beginning of hedge funds evolving from niche investment vehicles into power players of global finance.
By the 1990’s, a wave of financial deregulation across developed economies opened the floodgates for more aggressive strategies. Hedge funds strategies continued evolving, embracing arbitrage, corporate takeovers, and global macro trading. Fund managers emerged as the new warriors of capitalism- operating across borders, commanding capital with military precision, and earning hundreds of millions (or even billions) annually. One of the most iconic examples is George Soros’s Quantum Fund, which in 1992 famously shorted the British Pound, forcing the UK to exit the Exchange Rate Mechanism and earning $1 billion in a single day. The event, remembered as the day Soros “broke the Bank of England,” highlighted the sheer influence hedge funds could wield- and how their activities could contribute to financial instability on a global scale.
The 2000’s brought triumph and tragedy to the hedge fund industry. The collapse of Long Term Capital Management (LTCM) – founded by Nobel Prize-winning economists – revealed the dangers of excessive leverage and overconfidence in quantitative models, especially in illiquid markets. Simultaneously, the dot-com bubble fueled massive gains for some funds and devastating losses for others, as speculative bets on technology stocks soared and then evaporated. Leading up to the 2008 financial crisis, where a small group of hedge funds profited by shorting subprime mortgages, correctly anticipating the housing collapse while the broader economy lost trillions in value. These events reinforced the dual nature of hedge funds: both as vehicles for innovation and alpha, and as high-powered magnets for systematic risk in the modern financial era.
By the 2010s, a new type of strategy and trader had entered the financial markets — high-frequency trading (HFT) — driven by advances in high-performance computing, fiber-optic networks, and complex algorithms. These firms, often led by PhD-level “super coders” with backgrounds in physics, cryptography, and mathematics, executed thousands to millions of trades in mere milliseconds, exploiting even the smallest inefficiencies to extract alpha at scale. The core objective of HFT was to increase the velocity of trading — getting in and out of positions faster than traditional institutions could react — and profiting from the tiny spread between the bid and ask price, a tactic known as latency arbitrage. This speed advantage, coupled with technological superiority and asymmetric access to information, gave HFT firms a near-unmatched edge, often described as a license to print money. While HFT contributed to tighter spreads and greater liquidity, it also raised concerns around fairness, transparency, and the role of speed over strategy in modern finance. Regardless, HFT came to symbolize a new financial era — where code replaced instinct, machines outpaced markets, and milliseconds defined success.
In essence, hedge funds and high-frequency trading are part of a broader legacy: the rise of private financial networks of communication. From ancient Mesopotamian traders using temple records and Roman bankers exchanging handwritten ledgers, to the encrypted letters of credit of the Knights Templar, financial power has always gravitated toward those with faster, more secure, and more exclusive channels of information. HFT firms today operate within high-speed, closed-loop systems built on proprietary data feeds, co-located servers, and algorithmic architecture — effectively creating a modern digital equivalent of the secretive financial networks of old. These systems do not simply analyze the market; they anticipate and influence it through superior positioning and privileged access. In this context, hedge funds and HFTs are not just market participants — they are gatekeepers of a parallel financial infrastructure, where information asymmetry is the ultimate edge.
The High Priests of Modern Finance
We now understand the importance of asset management in a world without technology and understanding how money and valuables management have evolved over human history, influenced by economic theories, financial innovations, and technological advancements. The role of a finance manager is to responsibly manage investment funds by providing strategic asset allocation, risk management, and wealth generation. From the beginning of Jones first fund to modern HFT funds. We will review the most successful modern managers and the strategies used to conquer financial markets under any condition.
Ray Dalio founded Bridgewater associates in 1975, specializing in macro investing, risk parity, and the game-changing all weather portfolio. It is a diversified investment strategy designed to perform well across different conditions, including growth, recession, inflation and deflation. This strategy typically allocates assets across equities, bonds, commodities, and gold to balance risk and return. By spreading investments across asset classes with varying sensitivities to economic cycles, the portfolio aims to reduce volatility while maintaining steady growth.
In 1990 Ken Griffin created Citadel, one of the early electronic multi-strategy fund that diversifies across various asset classes. It operates across various core trading strategies, each contributing to the firm’s success. Equity long and short, goes long on undervalued companies and shorting overvalued ones using fundamental analysis and quantitative models to identify price inefficiencies. Citadel is a pioneer in the quantitative and high frequency trading space using algorithms and machine-learning driven models to execute trade in milliseconds profiting from market inefficiencies, arbitrage, and statistics signals. Most importantly it is a main market maker for global markets where it provides liquidity to financial markets by continuously buying and selling assets at quoted prices and profiting from the bid-ask spread while ensuring smooth and efficient trading.
Jim Simons created Renaissance technologies aka the “medallion fund”, which is the most profitable hedge fund ever, generating 66% returns before fees since 1988. The fund specializes in quantitative, algorithmic and machine learning-based investing. It uses mathematical models, statistical arbitrage, and machine learning driven strategies to identify hidden patterns in market data humans cannot detect. The fund is not reliant on market direction and buys and sells quickly to minimize risk exposure. It uses alternative data sources such as satellite images, news sentiment analysis and even weather patterns.
A Future Beyond Money: Reclaiming Purpose Through Decentralized Legacy
From the earliest stages of civilization, societies like those of Ancient Egypt, Mesopotamia, Greece, Rome, and the Phoenicians developed foundational technologies and systems that would shape the future of finance. These included grain-backed receipts, early futures contracts, maritime trade credit, and temple-based banking — all precursors to today’s complex financial instruments. As Western civilization matured, institutions like the Chicago Board of Trade (CBOT) emerged to formalize and standardize these practices, introducing innovations such as futures contracts, price discovery mechanisms, and risk hedging tools. This progression set the stage for the development of hedge funds and sophisticated financial products that defined the 20th century.
But what ties all these phases of financial evolution together is not merely innovation or performance — it is the mastery of private financial networks of communication. Whether through temple scribes, Roman argentarii, or encrypted Templar letters of credit, the most powerful financial systems have always relied on secure, trusted, and exclusive infrastructures. Among these, the Knights Templar’s global financial network perhaps most closely mirrors the ideals of Web3 — built on trust, redundancy, semi-autonomous governance, and most importantly, a moral mission: to empower the people and protect them from abuses of centralized power.
Today, with Web3 and blockchain technologies, we are poised to upgrade the Templar blueprint into a financial system that is borderless, transparent, and decentralized. Using decentralized infrastructure, Web3 mirrors the Templars’ physical outposts — which stored assets, facilitated transactions, and offered safe passage — with protocols and smart contracts that run autonomously on-chain. Where the Templars used letters of credit that could be redeemed across continents, Web3 users leverage non-custodial wallets and stablecoins to move value globally — without banks, borders, or intermediaries.
The Templars employed cipher systems to protect sensitive receipts and authorizations. In Web3, users rely on zk-SNARKs and advanced encryption to prove ownership or identity without revealing sensitive information — preserving both privacy and trust. Governance under the Templars was led by a central council yet allowed regional independence — very much like today’s DAO (Decentralized Autonomous Organization) structures, which enable communities to collaboratively manage protocols and treasuries. The Templars also extended credit to monarchs, accepting land and treasure as collateral — an early analogue to DeFi lending platforms, where users post digital assets for permissionless, collateralized loans managed entirely by smart contracts and governed by algorithmic trust scores.
For identity and legitimacy, Templar pilgrims relied on symbols, reputation, and recognition. In Web3, the emergence of decentralized identity frameworks now allows users to prove who they are without relying on centralized ID authorities — preserving sovereignty while enabling participation in global economies.
In reclaiming the moral and architectural essence of ancient financial networks through Web3, we are not just creating new tools — we are reviving an ancient purpose: to build a trusted, decentralized system of value and governance that serves people over power. It is not merely a technical upgrade; it is a spiritual and philosophical return to a system where finance is grounded in transparency, honor, and freedom.
Disclaimer: The opinions in this article are the writer’s own and do not necessarily represent the views of Cryptonews.com. This article is meant to provide a broad perspective on its topic and should not be taken as professional advice.
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