Money has been a part of the human experience for at least 5,000 years. Historians agree that bartering may have been used before that time. Bartering involves the direct exchange of goods and services.
A person might have exchanged some wheat for a pair of shoes made by a shoemaker, for example. However, this process could become time consuming as you would have to find someone willing to accept the exchange. If not, you will have to change the terms of the agreement until someone agrees.
Currency was the act of negotiating and trading such items, though their value in most cases was negotiable. The system of trade spread around the world, and is still in use today in certain parts of the world. To get help with your money, consider Cheltenham accountants like https://www.randall-payne.co.uk
When money was invented, it greatly sped up the process of doing business. In 2021, Chinese archaeologists revealed the discovery of Guanzhuang, the oldest coin minting site known to date. A Mint is an establishment where currency is produced. In approximately 640BC this facility started striking spade coinage, one of the earliest types of metal coinage.
In 600 BCE King Alyattes of Lydia minted the Stater, which many believe is the world’s first official currency. They were made of electrum, which is a natural mixture of gold and silver. They were also image stamped with these images acting as denominations.
Transition to Paper
It was in the sixteenth century that parts of Europe started to use solely metal coins as a form of currency. European conquests of new territories supplied fresh resources of precious metallics, and meant that European nations continued minting a larger quantity of coins.
The banks began issuing paper banknotes to depositors and borrowers instead of metal coins. The notes could be exchanged at any time for the face amount of metal coins, most commonly silver or gold. Paper money was used to purchase goods and services. It worked in a similar way to currency today. It was issued by private banks and institutions, not the government.
The first paper money issued by European governments came from the governments of North American colonies. The long shipments between Europe, the North American colonies and North America meant that colonies were often short of cash. Instead of returning to the barter system, colonial governments began issuing IOUs which were traded as currency.