From bartering to check printing and mailing, paper money and beyond; into digital payments and cryptocurrency, currency has always been a fluid concept. Currency becomes currency because of the significance humans attach to it. In this topic we will look into a brief history in currency or history of paper money and different stages of evolution of money. Over the years, currency has greatly evolved and it is interesting to see the various shifts in what humans saw as having value.
In this article, we’re looking at some of the things we’ve used as currency and how those could change in the future. As the global economy expands and the interchange between currencies continues to increase, it will be interesting to see how currency adapts. This article looks at the potential shifts in currency, how digital banking in the new norm and how the history of currency shows that these changes will continue in the future.
Money, in its modern conception, has been part of society for at least 3,000 years. Historians generally agree that bartering was used before money. A brief history in currency starts with barter system. Bartering is the direct exchange of goods and services. For example, a farmer might exchange a goat for three pairs of shoes. However, these arrangements are arbitrary and virtually impossible to regulate.
They also inhibit the economy from achieving freedom because in order to obtain what you want to buy, you have to find someone equally interested in what you’re selling. Eventually, a system of currency evolved to solve some of these problems. Trading systems adopted widely sought-after goods such as animal skins, salt, and weapons to establish a primitive currency system, but for the same reasons as bartering, these systems were riddled with just as many issues.
Despite their drawbacks, these early trade systems paved the way for future currency systems such as those that used paper money. The increase in commerce is largely responsible for this shift because the more merchants and consumers economies needed to support, the more diversified economies became, resulting in less demand for items such as animal skins or weapons.
The Chinese moved away from unsystematized bartering around 770 B.C., when they began using miniature replicas of weapons cast in bronze. However, the impracticality of these objects caused a shift to a circular bronze shape, the first coins. In a brief history in currency, coins turn out to be a second stages of evolution of money.
Though China was the first area to adopt what people associate as a coin, the first region to manufacture these coins in an industrial capacity was in Lydia, a town in what is now western Turkey. The manufacturing of these early coins marked the first mint, and the manufacturing process was the first minting.
In 600 B.C., King Alyattes of Lydia minted the town’s and the world’s first official currency. This was the third stages of evolution of money in a brief history in currency or history of paper money. These electrum-made coins were a mixture of natural silver and gold and the coins had stamped pictures on them constituting denominations.
This formalized system of currency helped increase both its internal and external trading systems, making it one of the richest empires in Asia Minor. When someone uses the saying, “as rich as Croesus,” they are referring to the last Lydian king who minted the first gold coin.
Around 700 B.C., the Chinese transitioned from coins to paper money. By the time Marco Polo traveled on the SIlk Road between 1271-1295, the emperor of China had a firm grip on the money supply in various denominations. Paper money is the forth stages of evolution of money under history of paper money when we discuss in a brief history in currency or money. He instituted somewhat draconian measures to respond to the threat of counterfeit by inscribing, “those who are counterfeiting will be decapitated,” on the bills.
Parts of Europe were still using metal coins as the sole form of currency up until the 16th century. Their colonial expansion provided the resources necessary for the switch from coins to paper money. The switch enabled them to keep minting a greater quantity of coins. European banks eventually started using paper banknotes for depositors and borrowers to carry instead of coins.
Citizens could take these notes to the bank at any time and exchange them for coin value. They could also be used to purchase goods and services. However, these notes were issued privately and not by government institutions.
The first paper issued by European governments was in colonial governments in North America. Intercontinental shipments took too long and colonist operations frequently ran out of currency as they expanded, necessitating the need to print money. Instead of reverting to a barter system, the colonial government issued IOUs and traded them as currency.
The 21st century in a brief history in currency and paper currency marks a monumental turning point in currency. This is in the form of mobile, virtual, and cryptocurrency. Mobile payment platforms such as PayPal and cryptocurrency such as Bitcoin are ushering in a new era in currency. These are one not controlled by governments, but a decentralized currency freely exchanged between the world’s citizens.
Whether these advancements are beneficial for society or not remains to be seen, but there is little doubt they will continue to carve a place in modern society as they increase the capabilities of commerce and simplify the exchange of money for goods and services.
Conclusion – A Brief History in Currency
Currency has come a long way since the days of bartering for goods and services. Throughout history, we have attempted to quantify value and there is no sign of the push for an umbrella currency stopping.
Coins made of precious metals were an attempt to centralize currency. After this, we started printing money backed by precious metals. More recently, governments abandoned this system of currency by switching to the fiat system, a system in which the government controls its currency output and paper money is no longer backed by precious metals. The volatility this created has prompted the push towards decentralized currencies such as cryptocurrency.
Where this shift to decentralized currency will take us is anyone’s guess. However, it is hardly debatable whether we are in a period of great change regarding currency. As we continue to shift towards a more digitalized world, mobile payments are reducing the need for tangible currencies such as paper money. One need only look at the increase of eCommerce and emergence of Amazon as evidence of paper currency’s antiquation.
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