A Brief Evolution Of Money

There is a long history for money to become what we are using today. It started from Barter where people tend to exchange goods for another good. There wasn’t any value equivalence involved in this procedure. Even in present we see this system in some primary economies where it is difficult to access. In this past this system was used to fulfill each other’s necessity with their excess yield. As an example, if a fisherman catch more fish than he need, he exchanges it with a farmer to get fruits or vegetables he needs.

After that era the Commodity Money became the exchange currency among people. Commodity Money means some commodities which are highly useful in day to day life which was used as a currency mode to assess their product values and act as a circulating element. In that period cattle and heavy working animals were used as commodity money since it had many advantages like mobility, reproducibility and the ability to use them in their work. Some other countries used salt as commodity money, because it was a valuable commodity in the internal continental countries and in that time salt was used as a food preservative. Most of the words we use today involving money are originated from that period where commodity money played the role of currency. Soon this method was found more inconvenience because most of the commodity money goods were quickly perishable and the value of those commodities changed with time.

After discovering metal, it became the new standard of value because its’ fascinating qualities like the possibility of accumulation, divisibility, ease of transportation and beauty. At first, metal was used as its natural state, and then it was used as metal bricks or later on it transformed into objects like rings, bracelets, etc. Still, this method was inconvenient to the people, because in each and every transaction the weight and the purity of the metal had been measured. To overcome that problem, later on the metal developed into a definite form and weight indicating its value and the person responsible for the issue. It was a quite a fast and convenient method for the people comparing with the previous methods.

Later, the production of metal items had become a difficult task since it required special knowledge of handling metal and discovering them. Because of this situation where metal became very valuable, it led people to use replicas of small metal objects as a currency mode rather than weighted coins. There can be found many evidence to prove this era in Eastern countries, Greece and Cyprus. Animal skin shaped bronze coins were discovered which were circulated in Greece and Cyprus before the present form of coins were introduced.

After that era of using metal pieces as money, people introduced more reliable and trustworthy method of valuation using small metal pieces which were valued, weighted and hold sealed, which guaranteed the value of the coin and it was marked by the person who minted the coin. This was 7th century B.C where coins were made similar to the present coins. We can find many political, cultural and technological features about that time and mostly it is a replica of the people of that time and their personalities. Hence a coin is a reflection of the past. Alexander the Great of Macedoina, is assumed to be the first ever historic character that had the privilege of registering his effigy in a coin, around the year 330 B.C. Some countries like Greece, Lydia used gold and silver as the metal for producing coins. The coins were not regular to each other and they had rough edges since they were hand made.

The coinage was started with gold and silver coins because of their unique characteristic like rareness, robustness to corrosion, value, beauty and most of all the religious beliefs of that time, etc. The minted gold or silver coins hold their intrinsic values. That means if a coin holds 20g of gold, goods can be bought to fulfill that value. Till last century, people used gold coins for higher values and silver and copper for lower values. But after the invention of cupronickel and other alloy metal coins, the intrinsic values become extrinsic. That means the value of the coin was considered as the face value, not their metal content or true value.

After the introduction of paper money, minting of metal alloy coins were restricted to lower values and they were mostly used as changes. Since the coins were circulated more often in this new role, it was required to produce coins with high durability. The paper money developed through a receipt which was used by goldsmiths in middle ages to guarantee their gold value.

Brazil is the pioneer of current bank notes. In 1810 Banco do Brasil issued the first ever note which was hand written. Currently producing of paper money has developed their techniques to print and issue more durable, secure bills to the public. Central Banks of each country are responsible for this process of issuing coins and notes of that country to the public.

The shapes and sizes of coins and notes have changed from time to time. Even if we currently use metallic circular coins, there were times when oval, square, polygonal and other shapes and other materials like wood, porcelain, and leather were used to produce coins. As coins reflect the past society through its carvings, notes also tell a story about its country’s culture, people and religion, etc. These notes are generally inscribed in its countries national language. But sometimes we can see some inscriptions in English are used to aim more people to use those notes.

A country’s monetary system consists with a set of coins and notes used within the country. Presently, most of the countries are using centesimal basis monetary systems. This system is regulated by a certain institute with highly knowledgeable personnel, to maintain the sustainability of the country. This institute is responsible for issuing notes and coins, sanitation, substitution of worn out and torn notes etc.

In day to day life, a huge number of transactions occur and in the present world, even notes and coins are not that much convenience to the people, since it is less secure and hard to carry. In order to overcome that problem, “checks” have taken the role of money. It is a very secure procedure where one orders the bank to pay a certain amount of money from his deposits to the “check” bearer or someone else mentioned in the check.

Money plays a huge role in today’s fast moving world by giving some unique advantages to the users like speed transactions of large sums, security, no need to carry lot of money to do the day to day activities and etc. Whatever the role money has, its value depends on the goods and services it can purchase. It was invented and developed based on human needs and it will be developed in future to give the people a better chance of handling their purchasing power more conveniently.