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A Historical Timeline of Money

Currency or money is anything that has value and can be traded for something else. Money has appeared in different forms over the past 12000 years. We’ve evolved from using shells and coins to using digital payment systems.

In the Beginning: Barter

Barter has existed for as long as humans have been alive on Earth. Even animals barter in their mutualistic relationships. Bartering is when someone exchanges one set of goods or services for another service or resource of equal value to the recipient. Each party to the transaction is satisfied by the fulfillment of needs. The barter system is still used today.

9000-6000 B.C.: Cattle

When humans became herders and farmers instead of hunters and gatherers, livestock like cattle became valuable currency. This phenomenon coincided with the dawn of agriculture. The fruits of the harvest also became useful goods for bartering.

1200 B.C.: Cowrie Shells

Cowrie shells are found in the Indian and Pacific Oceans. They were used as money for the first time in China. There have been reports of trade in cowrie shells in Africa also. Cowrie shells have been used longer than any other form of currency.

  • More Information About Cowrie Shells – Cowrie shells were good currency because they were hard and weren’t prone to deterioration.

  • All About Cowrie Shells – Cowrie shells became less valuable as they became more widespread. That’s when they were gradually replaced with other monies like gold.

1000 B.C.: First Metal Money and Coins

The first metal money appeared when the Chinese attempted to imitate cowrie shells using copper and bronze. Metal tools were also traded among the people. Eventually, the common form of currency was a round coin. No one had wallets, so the coins had holes so that they could be worn on a chain or a piece of string. This made it harder to lose the money.

  • Metal Coinage in China – Metal coins were the primary currency in China until they were replaced by paper during the Song Dynasty.

  • The Wuzhu Coin – The Wuzhu coin was a form of standardized coinage to unite the feuding mini-empires of China under one currency.

500 B.C.: Modern Coinage

Modern coins were inherently valuable because they were made of precious metals like silver and gold. Silver coins first appeared in Turkey, then spread to the Greek and Roman empires. Coins were authenticated by carving images of emperors or gods into the metal.

  • The Croesus Gold Coin – This coin was created in Lydia, Turkey, and had the image of a lion engraved on its face.

  • The Drachma – The drachma was coined in ancient Greece and was used for more than a thousand years.

118 B.C.: Leather Money

Leather squares were the first banknotes. In China, they were small squares made of deerskin and bordered by colorful embroidery or beading.

A.D. 800-900: The Nose

Have you ever heard the expression “to pay through the nose”? People who didn’t pay the Danish poll tax in Ireland had their noses slit.

  • An Alternative Explanation – A less bloody theory is that the Danish occupiers of Ireland counted taxpayers by their noses.

  • Money and Conflict – The Danes’ unique method of reducing tax evasion was an indication of how governing powers started to resort to violence to get money from their subjects.

806: Paper Currency

Three hundred years before paper money would become widely circulated, paper banknotes were being used in China. They were used as currency for 500 years until excessive printing led to the money’s depreciation and economic inflation.

  • Paper Money and the Silk Road – Marco Polo saw the circulation of paper money under the Yuan Dynasty in China. It was first printed under the Tang Dynasty.

  • The Kwan – The Kwan is now the oldest banknote in existence today. It was printed in China during the Ming Dynasty.

1500: Potlach

Potlach wasn’t money per se. It was a Native American custom among the North American tribes. Gifts were given in a ceremony of rituals, feasting, and dancing. Because the potlach was often synonymous with initiation into a special tribal society, gifts were lavish and extravagant. There was inter-tribal and intra-tribal competition to throw the best potlach.

1535: Wampum

Wampum comes from a Native American word for “white”, which was the color of the beads made from clamshells. The clamshells were strung on a thread and draped in layers. Important people in the tribe wore wampum.

  • Wampum in America – The circulation of wampum as currency increased after Europeans arrived in the Americas.

  • The History of Wampum – Wampum only circulated officially for a thirty-year period, but it was always valuable to the Native Americans as wampum beads were very difficult to make.

1816: The Gold Standard

The Gold Standard first appeared in England in 1816. Each banknote represented a certain amount of gold. 1900 marked the passage of the Gold Standard Act in the United States. The Act led to the creation of the Federal Reserve as the nation’s central bank.

1930: End of the Gold Standard

The 1929 stock market crash and the ensuing Great Depression forced the United States to revise the gold standard. Gold was devalued. As the effects of the Depression spread to Europe, other countries also started ending the gold standard. In the absence of the gold standard, foreign currency exchange rates began to govern the exchange of countries’ different currencies.

The Present:

Currency is constantly developing. There are new denominations and materials. Currency is also away for a nation to honor important cultural and historical icons.

The Future: Electronic Money

The future is digital. One day, no one will carry money at all. Credit cards and electronic payment systems will become the sole form of currency.

Additional Information on the History of Money


This page was last updated by Steven Jefferies