From Sean Paajanen,
Your Guide to Coffee / Tea.
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Back in the days of the Aztecs, cocoa beans were valuable not only for their culinary importance but also as currency. Cocoa beans were often given as gifts during important ceremonies and festivals. Even so, they also used the roasted beans to make a chocolate drink. Their version is much different from the hot chocolate we know today. The Aztecs actually drank it cold, flavoured with wine and chili peppers, and not at all sweet.

Chocolate was discovered and brought to Europe in the early 1500s by the explorer Cortez. After its introduction in Spain, the drink began to be served hot, sweetened and without the chili peppers. The Spanish were very protective of their wonderful new beverage, and it was over a hundred years before news of it began to spread across Europe.

When it hit London (in the 1700s), chocolate houses became popular and very trendy. It was the English who started adding milk to their chocolate and it was enjoyed as an after-dinner beverage.

It wasn't until the middle of the eighteenth century that chocolate began to evolve past its drinkable form. First, cocoa powder was invented in Holland. Cocoa powder blends much easier with milk or water, allowing for more creations to come. Then came chocolate as a candy by mixing cocoa butter with sugar. In 1876, milk chocolate was developed. From then on, chocolate has become more popular as a solid treat rather than as the drink it started from.