MoneyFinancial Dictionary -> General Finance -> Money
Money, we all use it. If we’re at the store, shopping online or investing in a business we all use money. Whether you like using plastic, prefer shopping online or still like to hold crisp notes in your hand, have you ever considered where money comes from and its history?
Today we define money as an item that denotes worth, which can be exchanged for goods, services or repayment of debts. We generally use coins and notes, but are moving in to a technological age where we often no longer need physical items (notes/coins) to represent our worth and are opting to use online services or credit cards.
The exact point in history when people began using representative items or coins to buy items is not overtly known, but since the beginning of time people have bartered back and forth and traded possessions. “I have this nice lamp; I’ll give you it for this cow.” Livestock was a very common form of barter and is still used today in some parts of the world.
Roughly around 1200BC in China the first type of money was used, in the form of cowry shells. They were usually carried on necklaces. This later developed in to the making of replica cowry shells made of base metals. Metal was valuable so tools were also used as payment.
At around 500BC the use of valuable, scarce metals as coins developed in Lydia and by 650BC they had started etching in pictures of Gods or words. This method was widely adopted by several other empires and the Greeks made it an efficient system.
The first notes came around in 118BC back in China in the form of leather and deerskin strips. China then began using paper notes in the 9th Century AD.
By the 1500s Native American Indians had evolved past barter and were using “Wampum” a currency made out of clam shells.
In the 1800s England stabilized their money by marking the value against a certain number of Gold ounces, reducing inflation. The US picked this up around 100 years later. This stopped in the 1930s in the great depression, when the Government began controlling inflation. This is now standard across the world to this day.
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