The History of Money

Money is valuable as a unit of account—a socially accepted standard by which things are priced and with which payment is accepted. However, throughout history, both the usage and form of money have evolved.

Though the terms “money” and “currency” are often used interchangeably, several theories suggest that they are not identical. According to some theories, money is inherently an intangible concept, while currency is the physical (tangible) manifestation of the intangible concept of money. So, money cannot be touched or smelled. Currency is the coin, note, object, etc. that is presented in the form of money. The basic form of money is numbers; currently, the basic form of currency is paper notes, coins, or plastic cards (e.g., credit or debit cards).

How Long Has Money Been Around?

Money—in some form or another—has been part of human history for at least the past 5,000 years. Before that time, historians generally agree that a system of bartering was likely used.

The Transition From Bartering to Currency

Bartering is a direct trade of goods and services; for example, a farmer may exchange a bushel of wheat for a pair of shoes from a shoemaker. However, these arrangements take time. If you are exchanging an axe as part of an agreement in which the other party is supposed to kill a woolly mammoth, you have to find someone who thinks an axe is a fair trade for having to face down the 12-foot tusks of a mammoth. If this doesn’t work, you would have to alter the deal until someone agreed to the terms.

Slowly, a type of currency developed over the centuries that involved easily traded items like animal skins, salt, and weapons. These traded goods served as the medium of exchange (even though the value of each of these items was still negotiable in many cases). This system of trading spread across the world and still survives today in some parts of the globe.

One of the greatest achievements of the introduction of money was the increased speed at which business, whether it involved mammoth-slaying or monument-building, could be done.

In early August 2021, Chinese archaeologists with the State University of Zhengzhou announced that they had discovered the world’s oldest known, securely dated coin minting site. A mint is a facility where currency is created. Sometime around 640 BCE, this facility, located in Guanzhuang in Henan Province, China, began striking spade coins, one of the first standardised forms of metal coinage.

First Official Currency Is Minted

Meanwhile, further west during this era, the sixth-century BCE Greek poet Xenophanes, quoted by the historian Herodotus, ascribed the invention of metal coinage to the Lydians. In 600 BCE, Lydia’s King Alyattes minted what is believed to be the first official currency, the Lydian stater.

The coins were made from electrum, a mixture of silver and gold that occurs naturally, and the coins were stamped with pictures that acted as denominations. In the streets of Sardis, in approximately 600 BCE, a clay jar might cost you two owls and a snake.

Lydia’s currency helped the country increase both its internal and external trading systems, making it one of the richest empires in Asia Minor. Today, when someone says, “as rich as Croesus”, they are referring to the last Lydian king who minted the first gold coin.

Transition to Paper Currency

During 1260 CE, the Yuan dynasty of China moved from coins to paper money. By the time Marco Polo—the Venetian merchant, explorer, and writer who travelled through Asia along the Silk Road between 1271 and 1295 CE—visited China in approximately 1271 CE, the emperor of China had a good handle on both the money supply and its various denominations.  In fact, in the place where modern American bills say, “In God We Trust,” the Chinese inscription at that time warned: “Those who are counterfeiting will be beheaded.”

Parts of Europe were still using metal coins as their sole form of currency until the 16th century. Colonial acquisitions of new territories via European conquest provided new sources of precious metals and enabled European nations to keep minting a greater quantity of coins.

However, banks eventually started using paper banknotes for depositors and borrowers to carry around in place of metal coins. These notes could be taken to the bank at any time and exchanged for their face value in metal—usually silver or gold—coins. This paper money could be used to buy goods and services. In this way, it operated much like currency does today in the modern world. However, it was issued by banks and private institutions, not the government, which is now responsible for issuing currency in most countries.

The first paper currency issued by European governments was actually issued by their colonial governments in North America. Because shipments between Europe and the North American colonies took a long time, colonies often ran out of cash. Instead of going back to a barter system, the colonial governments issued IOUs that traded as currency. The first instance was in Canada (then a French colony). In 1685, soldiers were issued playing cards denominated and signed by the governor to use as cash instead of coins from France.

The Emergence of Currency Wars

The shift to paper money in Europe increased the amount of international trade that could occur. Banks and the ruling classes started buying currencies from other nations and created the first currency market. The stability of a particular monarchy or government affected the value of the country’s currency, and thus, that country’s ability to trade on an increasingly international market.

The competition between countries often led to currency wars, where competing countries would try to change the value of the competitor’s currency by driving it up and making the enemy’s goods too expensive, by driving it down and reducing the enemy’s buying power (and ability to pay for a war), or by eliminating the currency completely.

Mobile Payments

The 21st century has given rise to two novel forms of currency: mobile payments and virtual currency. Mobile payments are money rendered for a product or service through a portable electronic device, such as a cellphone, smartphone, or tablet device.

Mobile payment technology can also be used to send money to friends or family members. Increasingly, services like Apple Pay and Google Pay are vying for retailers to accept their platforms for point-of-sale payments.

Virtual Currency

Bitcoin​, released in 2009 by the pseudonymous Satoshi Nakamoto, quickly became the standard for virtual currencies. All of the world’s bitcoin, as of June 2022, were worth just over $392 billion. Virtual currencies have no physical coinage. The appeal of virtual currency is that it offers the promise of lower transaction fees than traditional online payment mechanisms do and is operated by decentralised authorities, unlike government-issued currencies.

The Bottom Line

The history of money is still being written. The system of exchange has moved from swapping animal skins to minting coins to printing paper money, and today, we appear to be on the cusp of a massive shift to electronic transactions. Ancient transaction forms have been co-opted: for example, bartering still occurs on the margins in some markets such as the business-to-business (B2B) space and some consumer services. The monetary system will surely continue evolving as long as humans require a medium of exchange.

Worst thing you have spent money on?

When I was 8, I was in the car with my parents and brother, heading back from our holiday in the West Country.

I’d saved up my pocket money (50p per week!) and a bit of money I’d got for my birthday, and had five pounds left. I’d bought a few ice creams whilst we were away, and a couple of second hand books, but I’d saved most of the money, hoping to find something good to buy.

On the way back, we stopped in Bourton on the Water. The model village there is famous for being where Timothy Dalton gets the point in Hot Fuzz; it’s a chocolate-box pretty village with beautiful stone houses, a river with elegant arched stone bridges…. and a toy shop.

Eagerly I went inside, and looked around. Cap guns? Tempting, but the decent ones that looked like real guns were too expensive. Model trains? Nah.

And then I saw it, buzzing around under the ceiling.

A model Spitfire, with a battery powered engine, that “flew” in circles under the ceiling on fishing wire. I had a few Airfix planes already, but none that moved.

There were a couple of boxes under the demonstration model, on a table- and they were £4.99 each, reduced from £8. A lot of money for an eight year old in 1995, but this was quite a detailed model, and there and then, I made the decision.

I grabbed the nearest box and hurried to the till. The shopkeeper rang it up, and I emptied my little wallet of pound coins, 50p pieces, 20p pieces, and other assorted change. The box was so exciting, a picture of the Spitfire zooming into a climb, guns blazing, with a flaming Messerschmidt falling to earth behind.

I can still remember how excited I was, hurrying back to the car, showing the box to my brother and sitting in glee, thinking how much fun it would be to hang it up, and how exciting it would be to fly it round. I could put it on some really long fishing line, and it would fly all around the room.

I put off opening the box, as I didn’t want to lose any small parts in the footwells of the car. But when we got onto the motorway, I couldn’t bear to wait any longer. I tore off the tape, and opened the box.

It was empty. I’d grabbed the box of the display model by mistake. My Dad didn’t turn the car around, as apparently we had to meet my grandparents back at home, saying something to me through my tears about learning to check things properly before leaving.

Listener’s worst purchases

  • I bought a sybian for a person I was dating once that wanted it for Christmas… she took one look at it and decided it was too frightening so it sat in the closet for years until I posted it on craigslist and some creepy bastard took it off my hands for £200.
  • A windows phone. It would crash when it received a call, rendering me unable to actually take any calls.
  • The corndog that exploded in my mouth with green liquid. Caused me to throw up. I shat myself an hour later too.
  • Brazzers. Thought it was billed for a year by the month. Wasn’t – just charged for the year there and then.
  • Spent $1,000 usd on a digital pet for WoW. Biggest WTF am I doing adult moment for me. And a wake up call.
  • I bought a business that went under. Ended up having to file bankruptcy. 
  • The Gallant Few Podcast – About £20/30 to enter the great Scottish run about 10 years ago. Paid it early as an incentive to get fit. Had put on a stone by the time it came and didn’t bother… All the while that £15 donation to pure gym came out every month as well. Wit a laugh.
  • Night vision binoculars off Amazon. They were the equivalent of X-ray glasses from a mad magazine ad.
  • A ring for my cheating ex gf. I have never seen either of them since I found out. I dodged the bullet there.
  • Prossie in Amsterdam, paid up then thought %^*& this is the least arousing thing ever what the %^*& am I doing with my life and left….not sure if that makes me a shite bag or a good guy.
  • Spent £8 to go ice skating. Ended up breaking my leg in 3 places and not being able to walk for 6 months
  • A Versace suit circa 1999 – It had a dragon embroidered into the left leg, and a dragon embroidered onto the right panel of the jacket… Oh, and one on the waistcoat. It was £1800… 18… F*cking… Hundred, to look like, feel like and be pointed at like a total wank. Wore it once.
  • Callum – Cafe Andaluz for a quick scran in Edinburgh before a gig with the Mrs, paid £114 for 4 slithers of meat, steamed broccoli and a pint. We didn’t know it’s a set price for 14 tastes of meat, we stayed for 4 tastes before we had to go 
  • Bought a $20 pocket pussy that I shortly threw out in shame after I finished.
    • I feel you. I got heated in the moment and somehow convinced my GF to put her thumb in my butt. It was great until it was over and now I have to live with the shame. Honestly I think she’s forgotten about it by now but I visibly cringe every time she gives me the “thumbs up” sign. I can only wonder if she told her friends…
  • £250 for a drum machine for my son. An item that would cost about £50 nowadays. He had it all of two days when he decided to hear what kind of noise it made if he jumped off the sideboard onto it. It actually doesn’t make a sound at all and it never did after that.
  • Took out a 1k loan with welcome finance to fund a Trip to Amsterdam for the AZ Alkmaar game, ended up paying nearly 6k back over the years due to missed payments and rewrites. Still burns.
  • £10,000 on a Haflinger mare after riding her once. Turns out they are horrible bastard horses
  • When I was younger, I was devoted to this one brand of all-natural bar soap. The soap company was going to discontinue a few of their scents, and it so happened that the scents were all amongst my favourites. The company put the discontinued scents on sale and I decided I was going to stock up. 5 years later I still smell like green tea.
  • CemetryGates89 – Premier Sports
  • Conjoined at the face troll doll
  • A boneless banquet box from KFC
  • Marilyn Manson contact lens
  • Custom fitted toe rings
  • Santa head maracas
  • Neon Hot Dog dog sign
  • MC Hammer tickets.
  • A 40-lb bag of marshmallows
  • Frisbee that played music
  • I called a horse psychic

Drunken Logic

I was in my early 20s and working in retail at the time, which meant a lot of weekend work. But being in my early 20s also meant a lot of going out at the weekend.

One weekend in particular got pretty heavy and I realised too late that I would be in no fit state to work in the morning, as it was already getting light outside again.

I’d already been warned about pulling a sicky for being hungover so my drunk self knew I had to think outside the box for this one.

If I’d had an unfortunate accident that meant I couldn’t come to work then they couldn’t really get mad could they?

Drunk me “you could say you’ve broken your ankle that could happen to anyone” 

So without much deliberation I text my supervisor to let them know I’d broken my ankle, completely sober at 4:30am. 

I didn’t give it much thought after that and presumably passed out at some point in the next few hours.

I was woken up by my supervisor phoning me probably around 9-10am following up on my message to see if I was either coming in,drunk or genuinely injured.

This was a perfect opportunity to come clean but I was still half scooped and shat it so doubled down. Told him yeah I’d been out but slipped and sprained my ankle and would be off my feet for while.

This is where the purchase/purchases come into play – still drunk I went on to Amazon (other retailers are available) and ordered crutches and a moonboot stookie sort of thing and thought fuck it that should do and went back to bed to sleep it off, as after that day I wasn’t due back at work for 3 days.

The next day fear hit with a literal bang as the door went with a large parcel delivered for me. Then the stark realisation hits in that I’ve told my work I’ve got a broken ankle, things only get worse from here as when I opened I realised there’s only one crutch. One crutch that only came up 3/4s of my leg meaning I had to noticeably lean over to support myself. Clearly a red flag that was likely not supplied by a medical professional.

Panicked I log back in to Amazon hoping to find out there’s been some sort of mistake or that I’ve received shipment one of two. Nope I had in fact ordered a singular crutch.

What I also noticed was an unfulfilled order due to failed payment method for a wheelchair! I’ve no recollection of trying make this order so can only assume that at peak intoxication I’d thought of something more extravagant than a broken ankle.

So there I was with a lonesome crutch, a hangover from hell and a paper thin excuse for not being at work that weekend.

If you’re wondering, yes I stuck to the lie hobbled into work with a homebrew ankle strapping and a crutch that was a yard too short for me walking like Yoda with a hernia…

I won’t tell you where I worked but I will say that I went on to run that shop so that shows if you really commit to something then anything is possible!

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