When it comes to one of the most important things in our modern life, money has to be cited at the top of the list. It is almost impossible for us to make any purchase of the things that we need without them. Money is now widely accepted by many people around the world for the exchange of goods, resources, and services. However, each country has its own currency together with its paper money and coins. Today, we’ll take a quick look at the long history of money and its significance in our modern life. It’s nonetheless extremely important to understand the history of money when gambling at online casinos.
Historians have concluded that the need for money arises due to the consequence of the division of labor in our daily life. Back then, bartering was known as the ancient form of exchange. It was quite common to see a livestock farmer who traded his goat or cow for some farming tools produced by a blacksmith. In the traditional market, trading a bag of rice for a bag of beans was also very common. In short, a certain type of good or service was traded for other good or service which was considered equal.
At that moment, bartering was considered as the most effective means of exchange until they found several problems with this traditional system. Large livestock like a cow was pretty hard to carry out. It was impossible for them to split the animal into pieces so that they can use them for smaller trades. Everyone has their own interest. It was quite possible that the one we trade with has no interest in the goods we have in our possession. There were many types of commodities used for bartering such as cattle, tea, salt, seeds or tobacco. Most of them are easily perishable, and we find it hard to store them in a large amount. This is where the modern means of exchange or money steps in. We now have a corresponding amount of money for every object or commodity that we need to purchase. There is no longer a need for us to split our goods into pieces for smaller transactions. We can split our money into fractions. Let us take US Dollars or Euros for example. They can be divided into cents easily to meet your transaction scales.
The First Forms of Cons and Paper Money
Before we use coins and paper money like what we have today, metal objects were used as the means of exchange. The use of this conventional form of money was widely practiced around 5000 B.C.. At that time, metal was considered as money because it was easy to work with it. They found no problem in recycling the old metal and came up with new ones. More importantly, the materials were readily available in almost every country. In the western world, it was the Lydians who created first coins meant for trading around 700 B.C. Unlike metal objects, coins came up with a certain value. It quickly became an easy measurement to decide the cost of the trading items. While the paper money was firstly introduced in the ancient Chinese culture. Since 960 AD, the use of paper money has become more and more familiar in many different countries.
Representative and Fiat Money
The form of money does not end up with non-precious coinage and paper currency. They turned out to be representative money which is meant to represent the value of precious metals like silver or gold. We do not seem to care a lot about the materials used for creating paper money or coins. We fully believe in the government’s promise to exchange the representative money for a certain amount of gold or silver. Let us take the Pound Sterling of the British for example. It was used to redeem a pound of sterling silver. Gold is a very precious metal that many currencies in many different countries during the nineteenth and twentieth centuries use this yellow metal as their standard.
Later on, the representative money was considered as the thing of the past and fiat money stepped in as the replacement. In English, the right equivalent for Fiat is “let it be done.” The government fiat or decree is responsible for giving the value of money. That means the enforceable legal tender had to be made and any form of refusal or the use of another type of payment is considered illegal by law.
The Origin of Money Sign
In our modern culture, we have widely accepted that $ is a common sign of money. However, many historians fail to reveal the exact history of the use of this sign. Some of them believe that the money sign was originally used by the Spanish or Mexican sign for pesos. Some other trace the sign to the pieces of eight and piastres sign. If you take a closer look at some old manuscripts, you will find that the $ sign came from the P sign. It gradually turned into $ mark rather than P.
The US Money
The people of the United States was not familiar with the use of paper money until 1862. On March 10 in that year, the US government finally issued their paper money for the first time. It was available in $5, 10 and 20 denominations. Thanks to the Act of March 17 in the same year, all the denominations of the paper money became legal tender. In 1955, the law required the government to equip the paper money with a specific inclusion that says “In God We Trust” and 1957, the paper money carried the national motto for the first time.
There you have it, a quick look at the history of money. One thing for sure, money has become an integral part of our modern life regardless of which country we are living in. Each country has its currency that has different values in the stock exchange market. It is strongly believed that the use of physical money will be left behind as we now have debit cards or credit cards that we can use as a means of payment worldwide.
You can also check out the animated video below to get a brief but understandable story of money.