Money History: From Stones to Codes

money history

The origin of money takes its beginning in 7-8 thousand years B.C. when primitive tribes had a surplus of some products that could be exchanged for other necessary products.

Main Stages of the Development

  • The first stage – the appearance of money which were presented as random goods but had all money functions;
  • The second stage – the recognition of the gold as the universal mean of payment (this stage was the longest one);
  • The third stage – the stage of transition to paper or credit money;
  • The last fourth stage – the gradual displacement of cash from circulation, as a result of which electronic types of payments and different online borrowing options or home loans have appeared.

What Should You Know About Money?

The early form of metallic money is characterized by the coincidence of the metal commodity value contained in the coins and their nominal value indicated on the front side of the coin.

This is one of commodity money drawbacks. If their value as a commodity exceeds their value as money, then money will cease to function as money.

Because of this, since the 15th century, metallic money began to lose its commodity value. Currently, there is no country in the world where the metallic money has commodity valuable.

History of Paper Money  

The origin of paper money deserves special attention. Where did they come from? To answer this question it is necessary to know the history.

Soon after gold was used in transactions, it became obvious that it was inconvenient and insecure for both buyers and merchants to transport, weigh, and check gold for purity every time they made deals. Therefore, it was popular to put gold in storage for goldsmiths who had special storerooms and were ready to keep gold for a fee. Having received the gold contribution, the goldsmith gave the check to the depositor.

Soon, goods began to be exchanged for these checks, which turned into an early form of paper money, and the goldsmiths became the prototypes of modern bankers.

But it was over before some inventive goldsmith, started to give loans to merchants, producers, and consumers with interest rates (as same day loans in the modern world). In the future, the right to issue paper money passed from private persons to the state.

Online Money  

You probably heard about points that can be exchanged for real money. Or cryptocurrency, which exists in the form of a code, but it can also be exchanged for real money.

It is not a secret for anyone that the whole world is trying to refuse cash money. Now you can pay with a card, phone, even your watch, so why you should carry a bunch of paper with you. Such money is more difficult to steal, it is almost impossible to lose because you can lose a card or a gadget, but you always have an opportunity to restore access to funds in the bank.

Who knows, maybe it isn’t the last step of money development and there will be something absolutely new in the future.

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