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A brief history of money – how did it all begin?


Open Palm - A brief history of money - how did it all begin?

Today we know money comes in the form of coins and banknotes, and for hundreds and even thousands of years, it’s been this way. Maybe you’ve seen Ancient Roman coins in a museum, but money hasn’t always looked like this.


Going Way Back to Caveman Times


As far back as the Late Stone Age, up to 40,000 years ago, hunters bartered tools with one another, directly exchanging objects. We know that people did this for thousands of years. Farmers often traded their leftover crops for items deemed to have similar worth, such as clothes or food.


Instead of carrying these heavy goods around to trade with other communities, humans realised they needed a form of payment that was easier to transport. And so people began using smaller objects, ones that symbolised real value-creating what we now know as money.


Shell Out the Money: The First Currencies


Early currencies included copper rings, beads, cocoa beans and even axes. In Asia, Africa, Europe and Australia, humans used rare cowrie seashells as tokens of value. People could now store their wealth easily and use it as payment when needed. Today the word ‘salary’ has evolved from Roman times, when soldiers were paid in salt, a precious commodity because of its use in food preservation.


The Creation of Coins


The first coins were made by the Lydians from Turkey, around 600 B.C., where gold and silver coins marked with stamps were minted. Minting is the standardised production of coins, created by rulers and elites who could exercise their control over money and prevent forgeries.


This proved to be very successful, and Lydia became a wealthy country because people could trade easily with other societies and empires.



Paper Money with a Message


In 700 A.D., the Tang Dynasty in China were the first to use paper money. It was nicknamed ‘flying cash’ because of its tendency to blow away in the wind. Originally paper notes were used as receipts of exchange but soon evolved into standardised notes of value. Once again, the rulers of the country could have control over their money, and Chinese banknotes were even inscribed with a warning: “Those who are counterfeiting will be decapitated.”


Flying Cash Around the Globe


Explorers and traders like Marco Polo in the 13th Century began to spread the use of currency around the world, making money a universal medium of exchange. We still have different currencies today: from the Japanese yen to the Colombian peso. Although it comes in different colours and sizes, the money we see today has had the same concept for hundreds of years.


With money becoming increasingly digital since the 20th Century, it is important to look back and remember why we have money in the first place, and who knows – maybe one day we will go back to using shells and salt again.


This article is for information purposes only. It is not intended to be used as financial advice. You should seek specialist advice from your bank or a qualified Financial Advisor before making any financial decisions.

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