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A Short History of Money: Cow-Dung to Bitcoin

History of Money

The History of Money

Cow Dung Economy

Cow Dung Economy
Picture of a hut made from cow-dung.

Before the use of paper money and coins, what did people use? How did you buy things and pay for them? Did you know cattle used to be regarded as a very valuable currency? Cattle provided meat, skin for leather goods, bones for needles and arrows. Even cattle dung was very highly prized. Cattle dung could be dried and used as a glue to hold items together. Because of the natural gasses in it, dung was a spectacular way to start a fire. Cattle dung was used as a poultice for infections. People would trade a small sum for quality cattle dung. One would suppose if you were ill, the thought of dung on your injury would make you better. In early medical records, there is evidence that dung used to get mixed with oats and honey. It was effective in drawing out skin infections. Thank goodness medicine has evolved since then.

The History of Money and the Bartering System

The Bartering System
Image of ancient tribal people trading (bartering) fruit for fresh meat.

The earliest known transactions got done by bartering. If you needed a bolt of cloth, you might trade a cord of wood for it. It was the law of supply and demand. If it was a costly item such as land, you may have worked for it. You signed something such as a promissory note. When you finished working, the item legally became yours. The proper papers got signed and filed.

If you wanted to buy a sack of potatoes – before the invention of money or coins – but had nothing that the sales rep showed interest in, you would have needed to barter with others to get something of interest for the potato seller. Today you could use money instead.

The History of Money and the First Coins

The First Coins
Picture of the oldest known coin called the Lydian Lion. dating back to about 700 BC from present-day Turkey.

In 700 B.C., the earliest known coins got issued. Travel and exploration became a way of life. People still needed something of value to get goods. Items such as cattle were not convenient to take aboard sailing ships for months at a time. Gold and silver gained recognition as precious metals. With more people going from port to port, it was easy to pay with coins. Cities also charged for ships to be stored, so coins were an easy way to do this. Taxes were also imposed on residents and travellers. This way a city could keep up their services and give safety to their citizens.

The History of Money and Fiat Currencies

Fiat Currencies
Image of fiat currencies, including the United States Dollar (USD), Turkish Lira (TRY) and the Great British Pound (GBP).

Paper money came into use about the 13th century. Think of paper money as early check writing. You used a paper bill to pay for a service. The person receiving the bill took it to a trading house. These were the first banks. This also cut down on people being robbed of coins.

 

The History of Money and the Digital Revolution

history of money
Image of a real Bitcoin debit card, making money available for anyone in the 21st century.

The history of money has changed so much. And now we have credit cards, instantaneous bank-transfers, online shopping and digital currencies. Thank goodness for the fact that money evolves.

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