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The Historical Development of Bon
Some Tibetan historians and scholars, on the other hand, were aware of this distinction between the two kinds of Bon referred to above , and certainly the Bonpo Lamas themselves were aware of it. According to one leading native-born Bonpo scholar, Lopon Tenzin Namdak , the history of the development of Bon may be divided into three phases:
1. Primitive Bon was the indiginous shamanism and animism of Tibet and adjacent regions in ancient times. Indeed, according to Bonpo tradition, some of these practices such as invoking the gods (lha gsol-ba) and rites for exorcising evil spirits (sel-ba) were actually taught by Tonpa Shenrab himself when he briefly visited Kongpo in Southeastern Tibet in prehistoric times.  Such rites were later incorporated into the classification of the teachings and practices of Bon known as the nine successive ways or vehicles (theg-pa rim dgu). These shamanistic types of practices are now known as "the Causal Ways of Bon" (rgyu'i theg-pa). Teaching and practice found in the Causal Ways are considered to be dualistic in their philosophical view, that is, the gods (lha) representing the forces of light and order called Ye and the demons (bdud) representing the forces of darkness and chaos called Ngam have an independent existence, and the concern of the practitioner is principally with the performing of rituals that invoke the positive energies of the gods and repel the negative influences of the demons and evil spirits (gdon).  An examination of the ritual texts in question reveals them to be largely of non-Indian origin.  However, like Buddhism generally, Yungdrung Bon is totally opposed to the practice of blood sacrifice (dmar mchod), for the origin of such practices are attributed to the cannibalistic Sinpo (srin-po) demons and not to Tonpa Shenrab. Thus, Bonpo Lamas are loath to identify even the Causal Ways of Bon with the shamanism of the Jhangkris or shamans still flourishing in the mountains of Nepal who continue even today to perform blood sacrifices. 
2. Old Bon (bon rnying-ma), or Yundrung Bon (g.yung-drung bon) as such, consists of the teachings and the practices attributed to Shenrab Miwoche himself in his role as the Teacher or the source of revelation (ston-pa), and, in particular, this means the higher teachings of Sutra, Tantra, and Dzogchen. He revealed these teachings to his disciples in Olmo Lungring on earth and elsewhere in a celestial realm in his previous incarnation as Chimed Tsugphud ('Chi-med gtsug-phud).  These teachings of Tonpa Shenrab, already set down in writing in his own time or in the subsequent period, are said to have been brought at a later time from Olmo Lungring in Tazik to the country of Zhang-zhung in Western and Northern Tibet where they were translated into the Zhang-zhung language. Zhang-zhung appears to have been an actual language, distinct from Tibetan, and appearantly related to the West Himalayan Tibeto-Burman dialect of Kinauri. Thus, it was not some artificial creation fabricated by the Bonpos in order to have an ancient source language corresponding to the Indian Sanskrit of the Buddhist scriptures. 
Beginning with the reign of the second king of Tibet, Mutri Tsanpo, it is said that certain Bonpo texts, in particular the Father Tantras (pha rgyud), were brought from Zhang-zhung to Central Tibet and translated into the Tibetan language.  Thus the Bonpos assert that Tibetan acquired a system of writing at this time, based on the sMar-yig script used in Zhang-zhung which would, therefore, have been ancestral to the dbus-med script now often used for composing Tibetan manuscripts, especially among the Bonpos.  The Bonpos subsequently experienced two persecutions in Central Tibet, the first under the eighth king of Tibet, Drigum Tsanpo, and later the second under the great Buddhist king of Tibet, Trisong Detsan in the eighth century of our era. According to the tradition, on both occasions, the persecuted Bonpo sages concealed their books in various places in Tibet and adjacent regions such as Bhutan. These caches of texts were rediscovered beginning in the tenth century. Thus they are known as rediscovered texts or as "hidden treasures" (gter-ma).  Certain other texts were never concealed, but remained in circulation and were passed down from the time of the eighth century in a continuous lineage. These are known as snyan-rgyud, literally "oral transmission", even though they are usually said to have existed as written texts even from the early period. One example of such an "oral tradition" is the Zhang-zhung snyan-rgyud, which, in the eighth century, the master Tapihritsa gave permission to his disciple Gyerpungpa to write down in the form of his pithy secret oral instructions (man-ngag, Skt. upadesha). Or else, the texts were dictated during the course of ecstatic visions or altered states of consciousness by certain ancient sages or certain deities to Lamas who lived in later centuries. One such example of this was the famous lengthy hagiography of Tonpa Shenrab known as the gZi-brjid, dictated to Lodan Nyingpo (bLo-ldan snying-po, b.1360) by certain mountain spirits. This classification is rather similar to the Nyingmapa classification of its scriptures into bka'-ma and gter-ma.  This form of Old Bon flourished in Western and Central Tibet down to our own day.