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  • Evolution of Money

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    The document traces the evolution of money throughout history from bartering systems to modern cryptocurrencies in 7 stages: 1) Bartering systems emerged before money where goods and services were directly exchanged; 2) Commodities like gold, silver, and salt began to be used as a medium of exchange due to their intrinsic value; 3) Around 600 BCE, the Lydians created the first standardized coins made of electrum facilitating wider trade; 4) Paper money originated in China during the Tang Dynasty as banknotes representing gold and silver; 5) Fiat money derives its value from government decree rather than commodities and gained prominence in recent centuries; 6) Electronic forms of money like credit cards allowed for instant digital transactions without physical currency;

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    ekowoakaka

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    Evolution-of-Money (1)

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    The document traces the evolution of money throughout history from bartering systems to modern cryptocurrencies in 7 stages: 1) Bartering systems emerged before money where goods and services were directly exchanged; 2) Commodities like gold, silver, and salt began to be used as a medium of exchange due to their intrinsic value; 3) Around 600 BCE, the Lydians created the first standardized coins made of electrum facilitating wider trade; 4) Paper money originated in China during the Tang Dynasty as banknotes representing gold and silver; 5) Fiat money derives its value from government decree rather than commodities and gained prominence in recent centuries; 6) Electronic forms of money like credit cards allowed for instant digital transactions without physical currency;

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    © All Rights Reserved
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    7 views1 page

    Evolution of Money

    Uploaded by

    yumihiraya7
    The document traces the evolution of money throughout history from bartering systems to modern cryptocurrencies in 7 stages: 1) Bartering systems emerged before money where goods and services were directly exchanged; 2) Commodities like gold, silver, and salt began to be used as a medium of exchange due to their intrinsic value; 3) Around 600 BCE, the Lydians created the first standardized coins made of electrum facilitating wider trade; 4) Paper money originated in China during the Tang Dynasty as banknotes representing gold and silver; 5) Fiat money derives its value from government decree rather than commodities and gained prominence in recent centuries; 6) Electronic forms of money like credit cards allowed for instant digital transactions without physical currency;

    Copyright:

    © All Rights Reserved
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    of 1

    The history of money is a fascinating journey that spans

    thousands of years and is deeply intertwined with the


    development of human civilization. Here's a brief
    overview of the evolution of money throughout history:

    Barter System: In ancient times, before the concept of


    money emerged, people engaged in barter, exchanging
    goods and services directly. For example, someone
    might trade their crops for another person's livestock.
    However, bartering had limitations, such as the need for
    a double coincidence of wants (finding someone who
    wanted what you had and vice versa).

    Commodity Money: As societies grew more complex, certain commodities with intrinsic value, such
    as salt, shells, or precious metals like gold and silver, began to be used as a medium of exchange.
    These items were widely accepted because of their inherent value and durability.

    Coinage: Around 600 BCE, the Lydians in present-day Turkey were the first to create standardized
    coins made of electrum (a natural alloy of gold and silver). Coins facilitated trade by providing a more
    convenient and widely recognized medium of exchange. Various civilizations around the world
    eventually adopted coinage.

    Paper Money: The use of paper money originated in China during the Tang Dynasty (7th century CE).
    Merchants and traders initially used privately issued banknotes as a representation of the gold or silver
    held by the issuing authority. Paper money proved to be more convenient than carrying heavy coins.

    Fiat Money: Fiat money derives its value from a government decree or legal tender status rather than
    its intrinsic value. This system gained prominence during the last few centuries. Governments issued
    paper currency not directly backed by a commodity. Instead, people trusted that the currency had
    value due to government backing and the belief that it could be exchanged for goods and services.

    Electronic Money: With the advent of technology, electronic forms of money emerged. Credit cards,
    debit cards, and electronic transfers became popular, allowing for instant transactions without physical
    currency. The rise of the internet and digital payment systems further revolutionized the way people
    exchange value.

    Cryptocurrencies: In 2009, Bitcoin, the first decentralized cryptocurrency, was introduced.


    Cryptocurrencies are digital or virtual currencies that use cryptography for secure transactions. They
    operate independently of central banks and are based on decentralized ledger technology called
    blockchain. Bitcoin paved the way for the development of numerous other cryptocurrencies.

    Throughout history, money has evolved from simple bartering to sophisticated digital transactions. The
    form of money continues to evolve as technology advances and societies adapt to new financial
    systems and innovations.

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