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A brief history of money

Though its existence is often taken for granted, money is a revolutionary social artefact that has transformed our daily lives. Let’s look at how humanity has moved from relying on barter to using lightning-speed digital payments. 

History of money

Money has been an integral part of our history for the past 3,000 years, playing a key role in human economic interactions: serving as medium of exchange, unit of measurement, and store of wealth. Despite this continuity, however, the nature of currency is anything but stagnant. Being a global pioneer in commercial usage of cryptocurrency, Exeno is a powerful example of the rapid evolution of money over the recent years.

How did people trade before money was introduced?

More than tens of thousands of years ago, humans started practicing barter: the proto-trading system of exchanging goods and services without a monetary medium. This direct exchange of products had obvious limitations: it was unstandardised, and thus very subjective and even contradictory at times. This type of trading was not fit for the globalised future. 

Gradually, currency-like mediums of exchange started to appear. In 9000 – 6000, B.C certain communities used livestock (e.g. cows, sheep, camels) in a manner resembling modern money. Likewise, cowries (mollusc shells) were considered ‘currency’ in China in 1200 B.C. 

Emergence of coins

First coins were created in China, around 770 B.C. The revolution started with miniature copies of real objects (such as weapons and tools) made of bronze. As those miniatures were inconvenient to carry around, however, they were gradually replaced by small round pieces of metal – the first coins. 

Although China was the first to invent coins, the centralised manufacturing of coinage was introduced one and a half-century later in King Alyattes’s Lydia (former Europe and now western Turkey). The Lydian Staters were made of gold and silver alloy and stamped with a state seal, which confirmed their value. 

Issuance of first paper money

Continuing its history of inventiveness, China was the first country to make the switch from metallic to paper money. 7th century A.D. saw the introduction of promissory notes confirming ownership of a certain amount of money, put in possession of a trustworthy party. Such notes could be exchanged for coins. 

Europe has made its switch to paper money largely because of colonialism: the shortage of cash in North American colonies has forced governments to search for alternative solutions. Thus, in the 17th century, colonial governments started issuing so-called IOUs (‘I owe you’), written acknowledgments of debt that one party owed another. 

The use of paper money tremendously simplified and stimulated international trade and led to the formation of a currency market.

20th and 21st centuries: the age of breakthroughs

Both the 20th and 21st centuries were marked by a rapid series of breakthroughs in the field of global payment and currency systems. In 1958, American Express issued its first card, initially made of paper. It became the world’s first plastic credit card just a year later.

In 1997, Coca-Cola introduced the first mobile wallet, then used for buying drinks from a vending machine in Helsinki. 

PayPal was another significant step for the digital payments industry. Launched in 1999 by Ken Howery, Max Levchin, Peter Thiel, and Elon Musk (‘the PayPal Mafia’), it was the first company to specialise in online payments.

Finally, in 2009, the famous and yet mysterious Satoshi Nakamoto (a name we now know is the pseudonym of a person or a group of people) created Bitcoin, the world’s first and still most popular cryptocurrency. Nowadays, cryptocurrency is the flagship technology of next-gen money. You can truly experience its promise at Exeno.com, a store built around direct cryptocurrency payments. We accept BTC, ETH, BTCV, and USDT, without KYC procedures and FIAT conversions. 

The last decades have brought us innovative solutions at a previously inconceivable speed. If you want to know more about those revolutionary changes to payment methods, check out this article: From cards to crypto.

Sources: 

https://www.investopedia.com/articles/07/roots_of_money.asp

https://www.pbs.org/wgbh/nova/article/history-money/

https://www.britannica.com/video/187664/history-money

https://www.investopedia.com/terms/b/barter.asp

https://www.investopedia.com/terms/i/iou.asp

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