Transformation of Money over the years

Transformation of Money

Transformation of money over years is a pretty insane story. How did humanity come to accept rectangular pieces of pulped as something to spend eight to ten hours a day working for? The change from hard currency like gold or silver is a huge deal. We couldn’t have the vast industrial and post-industrial economies we have today without it. This transformation transformed the way we do business and permanently impacted how governments were funded. Learning about this massive sea change in we how as species thought about money helps reflect on current historical shift. From seeing paper as money to seeing bits, seeing digital ones and zeros as money. But before we get into exiting story of people trying to convince other that paper was worth something. To understand why this is such a huge deal, we have to discuss about the transformation of money.

How it all started

Humans relied on a trading system thousands of years ago, before money existed. If you are a farmer left over crops can be traded from the clothes of a tailor or beer from the brewer. In ancient China instead of breaking their backs carrying hundreds of items around them people began to carry small tokens that represented the items that they wanted to trade. Eventually the transformation of money from tokens were replaced with abstract circles that could represent any items. According to writings from the time early romans were paid in salt which is where we get the word salary. The first coins we would recognize today were issued in Lydia now called Turkey in about 600 BC. They were constructed of electrum, a naturally occurring gold and silver alloy, and made King Croesus very rich.

Paper money was first developed by the Chinese in around 700 AD just after they invented woodblock printing. They called it flying cash as it had a tendency to be carried away by wind. When Marco Polo visited China in 1200s, he bought an idea of pay plane back to Europe. At that time the Florin had become in accepted coin across the continent. When the British empire colonized America the government restricted colonists from minting currency so they wouldn’t be able to make payments. This was a flawless plan unperturbed. Instead, the colonists grabbed any foreign cash they could lay their hands on. Particularly popular was the large silver Spanish dollar which was known as  piece of eight because it was worth a treeless as it was made of silver a soft metal. When someone needed money, you might physically chop it apart.

Transformation of Money in the West

Paper money wouldn’t see wide adoption in the west until the mid-1600s when bank started issuing notes. It promised to pay the bearer on demand as some of gold merchants found it much simpler. To just trade the notes with each other rather than lugging around large amounts of unwieldy metal is really simpler. Because there was insufficient gold to support the American Civil War, both sides produced massive sums of government-backed paper currency. Union currency became known as greenbacks thanks to the green inks printed on the reverse side. It is still a color associated with money today. In 1946 the worlds first charge card creatively named the charge it was introduced. It was limited compared to modern credit cards but proofs such a useful idea it would lead to the BankAmerica now known as Visa and Mastercard.

Money finally entered digital age in 1980s with the introduction of automatic teller machines with personal identification numbers and debit cards. In more recent times a new phenomenon has evolved called cryptocurrency as you may know better is bitcoin. As individuals began to use the internet, electronic money services arose, providing users with an alternative to traditional banks. The money is decentralized, which means it is held over the whole internet and is not owned by anybody. So, it seems we have come a long way from trading goats for wood while they once dominated banks are becoming increasingly less important to our daily finances. We started with a cashless society and with the rise of chip and pin and contactless payment cash is on increase. What does the future hold? Will we completely go digital or come up with even stranger way of buying the things we want?