A brief account of the history of money and currency: Part 1 - Money in Distant History

April 04, 2023 07:00 Sukrit Sunama Knowledge  

Every day, we put in a lot of effort to generate more money by selling things or providing services. But has anyone ever asked the question, "What is money?" and "Why do we need it?" I believe many of my readers have more questions about currency. Let me introduce you to the short history of money.

Money is an old tool that humans have used for exchanging items for the past 10,000 years. If you recall your history classes from junior school, you'll remember that our ancestors used shells as a form of money to exchange items. Imagine how difficult it would be to match the demand and supply of each person if we didn't use money. That's how money was created in the first place. In more modern times, during the Roman Empire, Ancient Egypt, the Mayan civilization, and the Chinese kingdoms, precious metal coins were widely used around the world. And, trust me, gold played the most important role as money during that period.

The definition of money has two degrees. Money is the object that a pair of traders accepts to exchange for goods of equal value. And money can be split into smaller pieces, each of which retains the same value. Therefore, according to the definition, gold is perfect for use as money. Other precious metals, such as silver and platinum, are also suitable.

If we look at today's money, is the money in our pockets still made of gold or any other precious metal? No! Today's banknotes are made of cotton or plastic, and coins are made of nickel, copper, or zinc. They are not close to any precious metal! But why do these forms of money still work? And, nowadays, a lot of people use cashless payments instead! How did a piece of plastic (credit card) or a symbolic printing (QR code payment) become a medium for exchanging our products and services?

Let's find out in the second part of this article. Please subscribe to my mailing list to receive notifications when it becomes available.


Sukrit Sunama

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