From the moment society began to develop and progress, people needed ways to exchange goods and services with one another. From there, it evolved to become a valuable asset and a unit of account to gauge the value of goods, services, and other items that played vital roles in the economy.
What we understand as “money” today is a long and rich history of enabling these exchanges, growing more sophisticated as technology and material conditions improved. Barter was the first form of exchange or trading based on what was seen as a fair deal between both parties. This was further streamlined with items and goods that were easier to trade, such as salt, animal skins, and weapons.
However, trading goods were not easy to bring around, triggering the next phase of money’s evolution. Coins took the place of trading goods, with China and Europe pioneering the move to make it easier to purchase items and services.
As the years passed, the widespread use of coins created the demand for banks to store them and keep them safe. Banks would then issue paper notes that could be exchanged for their face value in coins. This added layer of security and the ability to pay for goods and services in large quantities galvanized more economic activities for a long while.
In the last decade, cashless transactions began to take root. These relied on smartphone apps to send and receive money between merchants and clients or peer-to-peer transactions.
Now, digital currencies have entered the fore. With its purely electronic existence and reliance on technology and encryption to facilitate and secure transactions, these currencies no longer rely on traditional institutions to regulate them. Additionally, digital currencies promise reliable and safe transactions without compromising a user’s identity.
Learn more about the evolution of money over the years and what the future holds in the infographic below.
What is money – evolution over the years evolution of money over the years