Erik TorenbergGeneral Partner, Andreessen Horowitz

💸 The INVENTION That Rewrote Finance Rules

20 Apr 2025 · 1 min

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In this segment of the YouTube video "💸 The INVENTION That Rewrote Finance Rules," the speaker highlights the telegraph’s adoption during the second half of the 19th century as a pivotal shift in financial history. Prior to the telegraph, all monetary and banking information traveled at the speed of physical matter—human travel or the movement of paper ledgers—limiting the speed of transactions across continents. The installation of undersea and transcontinental telegraph cables allowed information to be transmitted at near‑light speed, enabling real‑time global ledger updates. This new speed variable fundamentally altered the balance of power in finance, granting those who could leverage rapid information transmission a decisive advantage. The core claim is that the telegraph, by breaking the physical‑speed barrier, rewrote the rules governing financial authority and market operations.

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The really kind of big trend shift was the adoption of the telegraph in the second half of the 19th century. So for the first time, every other commodity money, all these other banking technologies, what they shared in common is that information still moved at the speed of matter. You couldn't send information from the UK to America or to India any faster than humans could get there. Even banking ledgers still could only move at the speed of physical paper getting there. And what the telegraph did, especially once all those undersea cables and transcontinental cables were installed and started to be used and incorporated, was that you could update ledgers globally at roughly the speed of light. And so for the first time, speed was a new variable, and that dramatically shifted who has the power here.