A Brief History Of Money And How It Has Developed
What is money? Everyone should be able to answer this question. It is a universally recognized part of every culture on earth, although the form may vary from place to place. Money is the heart of commerce, trade, and exchange. It means through which all of us obtain goods, services, and resources. Money has been used by nearly every culture and society in human history for the same exact purpose although the form of currency has gone through many transitions over the millennia. How human beings have developed money is quite an interesting tale may present a few surprises to those who take the money in their pockets for granted.
Most of us are intimately familiar with the paper money and coins that make up most of the world's currency. We also understand to a degree how money can be transferred electronically or how credit and debit cards are used in the same way as paper currency. But, where did these familiar realities find their origins? What did the earlier cultures use for money?
Just as familiar as money is the concept of bartering. This practice actually predated the creation of other methods of exchange. Bartering is simply the act of trading one object of inherent value for another. For example, if you needed a flock of cows for food and milk and someone else needed sheep for wool, then each of you determined the relative value of what you possessed and agreed to a trade. This very crude concept that didn't always work out well since disagreements about the worth of an object or objects tended to hinder the whole process of exchange. This led to the search for more universal items that everyone regularly used and, thus, valuable. These items came to be called commodities. Prime historical examples of commodities include cattle, seeds, tobacco, salt, as well as tea. They were valued by various peoples over time.
Using commodities as a source of money presented difficulties. Most of the time, it was a matter of convenience. Transport and preservation of the commodities also had a lot to do with the further development and consequent abstraction of money until it ultimately reached its current form. Instead of using commodities, many cultures started using objects like beads, shell, and metal as forms of currency of established values. This process was continually refined century after century until coins and paper money was the result.
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