Monday, December 15, 2014

Essay on Evolution of Money

For starters, let's figure out, what is money? This is a special kind of commodity, which plays the role of a general equivalent, and has specific functions: means of payment, the accumulation, circulation, the measure of value.

Prerequisites for money were trade relationship between humans based on barter. At this point, people have started to realize the inconvenience associated with this system, it was expressed in the absence of a specific equivalent, which could be a fixed cost of goods allowing the deal between buyer and seller.

It is impossible to say exactly when the first money was used or officially adopted. One of the most ancient mentions about dates back for 4500 years and comes from a place located in the modern State of Iraq. It talks about the silver, as a due measure of payment. Money looked differently at different times.

Stone money, in the form of a disk, was used on the island of Yap (the Pacific Ocean) to pay for the litigation and the public expenditures. Among them were these giants up to 4 m in diameter.

Money-axes were used by native Americans in Mexico, they were kind of small axes made of copper. In addition to this money, the Indians also used cocoa beans for payment.


Ethiopian salt sticks from salt deposits were used as money until the 1920’s in Ethiopia.


Money made of feathers was used in the Pacific Islands, Santa Cruz, and were mostly used in marriage ceremonies and when buying ocean-going canoes. They had the kind of fine feathers of red color, long up to 10 m, glued and connected using plant fibers in circles.

Coins (metal plates with picture) were first manufactured in Asia minor (the Kingdom of Lydia, modern Turkey), in the 7th century BC, made of electrum (a natural alloy of gold and silver). The accuracy of the weight of the coins was guaranteed by the image on the coin, most often it was the logo of cities were it was made in.

It is possible that their primary function was to serve as decoration for your toes and hands, and then they started to be used as means of payment.

The first mentions about a system similar to modern banking, dates back to 600 BC. The data evidences of the banker Tefie, which has been the owner of a network of offices in Ionia and Greece and used non-cash payment (bank receipt Tethys).

The first paper money was used in China in 910.

Since the twelve century to our time money (currency) intensively developed. The first credit card was created in1950; it was intended to pay for dinners, lunches, or suppers at restaurants. And two years later there was the first bank credit card.

Since 1971, the dollar is no longer equivalent to gold.

Today it is difficult to imagine modern life without plastic cards, you can pay just about everywhere.

And such money as banknotes and coins ceased to play a central role on the market and in our lives.

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