Amsterdam's canals played a key role in the city's growth and rise to power. Amsterdam's canals were designed and built in a series of concentric "rings" which curve around the medieval port, but are not complete circles.
Amsterdam grew from a small, fortified medieval town into a large city that served as a major hub for international trade. In the 16th and 17th centuries, Amsterdam transformed itself; the city's system of canals was part of a larger plan to drain land, erect houses, churches and other buildings on it and use the canals to transport goods to the city's port area.
Amsterdam's canals are lined with houses, many of which date back to the merchants' heyday in the 17th century. Wealthy merchants could afford to build homes that fronted the canals. Most homes were quite narrow, but were several stories high. Merchants used pulleys to lift goods from the canal to flood-safe attic storage areas; you can see these pulleys projecting from the roofs of canal-front homes even today.