Money now comes in a variety of ways thanks to internet banking, online contactless payments, UPIs, credit cards, debit cards, and other tools. We don’t give much thought to where we keep our money or how we handle or move it. That wasn’t the case a few thousand years ago.
What is currency?
It is an item that buyers will accept in exchange for products and services. Money has existed in many different forms throughout history, but its definition has only changed in one way: nowadays, only some people accept it. Early cultures relied on a trading system since they hunted, fished, and farmed to meet their own needs. A family may exchange their spare veggies for a basket of fish from another family. However, this system was rather onerous. The fisherman would have to make a number of transactions to obtain the necessary veggies if the farmer did not want fish that day.
People started looking for items with a similar worth to facilitate trading. The item needed to be valuable, beneficial to everyone, yet tiny and light enough to be carried for it to function well. Salt was one of the first forms of this “commodity money” that people experimented with. Small pots of salt were carried by ancient Middle Easterners who exchanged them for other goods. (Source: World History)
Shells were abundant, sturdy, and earned excellent money. However, another item that was made of metal matched these standards in other regions of the world. By 800 BC, areas of China and the Middle East were using large bars or even lumps of gold, silver, and copper. Early Roman farmers used simple copper or bronze bars. The metal was weighed at every transaction since it was traded for its genuine value. Eventually, traders started marking the weight on each bar.
Coinage was unavailable to the early American colonies. Few of the early immigrants to the British colonies were wealthy, and the funds they carried with them soon flowed back to Europe to purchase supplies. The British authority prevented the colonists from printing their own money. (Source: Early American currency)
As time went on, numerous governments all around the world started issuing notes instead of their coins. The notes themselves had no value, in contrast to prior types of money. Simply put, the government committed to pay the owner the note’s face value in gold or silver. By the 1700s, these early varieties of paper money—which were initially used in China more than 1,000 years ago—had spread over the whole world. Today, we moved to cards, UPIs and even crypto-currency. One can wait to see how money evolves further!