I've read many articles about them using clay tokens to ensure some authenticity of transactions, called Bulla, but I can't find any information about how they actually work.
Can anyone clarify?
It seems to suggest that if Steve buys 5 chickens from Bob, then he can write "Steve Owes Me 5 Chickens" on a piece of stone, and then bake it into a clay ball. Then this can be traded. But who keeps the clay ball? If you have an obligation, you can just throw it away and pretend it never happened. If it's Bob that keeps the token to prove Steve owes him, how does the ball itself prove anything? He could just lie and make his own clay ball with fake instructions inside.
There must be something I am not understanding about the security feature. Some articles suggest that tokens are inside the ball, rather than a contract, which is even more puzzling.
Edit: Also found this http://viking.som.yale.edu/will/finciv/chapter1.htm
Denise Schmandt-Besserat may have discovered the origins of writing on the surfaces of the clay bullae, but the mystery remains -- why did the ancient accountants of Uruk use a cumbersome bullae system for their records? Indeed bullae remained in use even after the full development of written script. The answer lies in the fact that they were more than accounting tools -- they were actual contracts.
Everything we think of as a financial instrument today is, in fact, a contract. A government bond, for instance, is a contract between the government and the bond-holder to guarantee a series of payments in the future. A share of stock is a contract between the shareholder and the corporation that guarantees participation in the profits of the firm, and a right to vote on management. Although contracts existed before the invention of writing, and even before the invention of bullae, the hollow clay balls and their tokens appear to be the earliest archaeological evidence of contracts. Each bulla found in the Inanna temple complex meant that someone -- and we don't know who, made a promise to give some commodities: jars of honey, sheep, cattle -- perhaps even days of work, to the temple. The writing on the outside of the bulla allowed the contracting parties to refer to the amount owed over the term of the contract, but the tokens inside, kept by the lender as evidence of the agreement, tangibly symbolized the obligation. This interpretation may explain other curious features of the bullae as well. Some of the envelopes are covered entirely in the impressions of cylinder seals -- the Mesopotamian equivalents of signatures. These undoubtedly represent a personal mark indicating the promise of the owing party. Bullae that are entirely covered in seal impressions seem to suggest that the owing party was concerned that the bulla holder might break open a small part of the bulla and insert some additional tokens.
We cannot really call the bullae the first financial instruments, because we do not know who the contracting parties were. We do not know whether the obligation is a return of a loan, or simply a tax or tribute to the temple. The bullae do not specify time (or at least Denise Schmandt-Besserat has not decoded the symbols for time) and they do not specify interest rates. All we know for sure is that they formalized commitments of future payments. The bullae were contracts that bridged a period of time -- from the moment when one party entered into an obligation, to the moment when the obligation was discharged.
But it's still unclear to me exactly what the tokens are for inside the bulla, if the bulla represents some kind of contract.