History of money

Done by: Haneen Helal

What is Money?
Money is any good that is widely used and
accepted in transactions involving the transfer of
goods and services from one person to another. It
is any item or verifiable record that is generally
accepted as a payment for goods and services and
repayment of debts, such as taxes, in a particular.
Money is a medium of exchanges, this means that
it has to be accepted by other people so that we
agree that it has some sort of value, and we can
exchange it for certain things. Money acts as a unit
of account, it is a store of value, and it is a means
of deffered payment ( Deffered payment are
 Barter System 9000B.C
Money has been part of human history for at
least the past 5,000 years. Before that time,
historians generally agree that a system of
Bartering was likely used. Bartering is the act of
exchanging goods and services without using
money. It may be in the form of food, apparel,
decorative item, tools or weapons. For example,
a farmer may exchange a bushel of wheat for a
pair of shoes from a shoemaker. Even today, the
system of bartering is still being used by some
individuals and organizations.
 Advantages and disadvantages of
Bartering
Advantages
Flexibility is one of the advantages of the barter ecosystem. You can
swap one related item for another, such as a laptop for an Ipad, or two
completely unrelated goods, such as a television for a vacuum cleaner. 
Disadvantages
A double coincidence of wants between two parties is required for a
barter trade exchange to take place in the barter system. In other words,
what a person wants to purchase and sell must be the same as what
another person wants to buy and sell.
Commodity money
Commodity money is a valuable item that functions as a form currency.
This type of item has intrinsic value, meaning it’s worth money on its
own. However, it becomes commodity money when people agree to
accept it as a form of currency. Gold and silver have been two of the
most common forms of commodity money throughout history, but
anything can be used as commodity money as long as it has value to
people. Dried beans, grain and pieces of wood can be commodity money
if people agree that they have value and are willing to trade them for
other goods and services. Commodity money depends on what’s most
valuable to people in a society. For example, animal fur and cigarettes
have served as commodity money for societies in the past.
Advantages of Commodity
money

Diversification Good for Saving

Lower inflation Commodities have Since the physical stock of
money is based on a negative or low commodities tends to
physical resource, it is less correlation with stocks. grow slower than the
prone to devaluing from Commodities are usually market, commodity-based
inflation. raw materials required to currencies are more likely
make the finished goods. to undergo deflation.
Disadvantages of commodity
money

Leverage Slower Economic

Variation in Quality
It can be a double-edged Growth
For any physical resource,
sword. Leverage, as we commodity-based
some samples of it will
discussed earlier, helps economies tend to grow
vary in terms of their
you control a big position slower than fiat-based
physical quality.
with little upfront capital. economies.
Bronze age 3000B.C
In several places around the world commodity
money was gaining traction. commodity money
are objects that are valuable by themselves and
are also valuable when using them as
money. They used cowrie shells, cattle and other
things to trade with. Cowrie shells are shell of a
mollusk that was widely available in the waters
of the Pacific and Indian Ocean. More than just a
decorative piece, it was first used as money in
China during the Shang dynasty.
Chinese miniature
replica 1100B.C
Around the year 1100 B.C in certain parts of
China miniature bronze replicas of goods were
being used, so if you had wanted to get a
sword, you would have likely needed to have a
miniature bronze sword as the equivalent
currency to get one.
This could turn very impractical as imagine
that any possible miniature replica objects that
you could make could turn our uncomfortable
or even dangerous to carry.
Lydian Lion 600 B.C
The Lydian Lion is the oldest coin in the world. It is a
one-sided design featuring a roaring lion, the emblem
of the Lydian Kings. Lions have been considered
kings of the jungle, and symbols of kingly authority.
Each coin was made from electrum alloy, a mixture
of silver and gold. These coins are pricey and though
scarce are not rare, just in significant demand because
of their history, the evocativeness of their design and
their characteristics. The coins were minted in Sardis,
with an unmistakable design that represented the city,
the foreparts of a lion and a bull facing one another. It
First Paper Money 700A.D
Around 700 B.C., the Chinese transitioned from
coins to paper money. By the time Marco Polo
traveled on the Silk Road, the emperor of China
had a firm grip on the money supply in various
denominations. He instituted somewhat
draconian measures to respond to the threat of
counterfeit by inscribing, “those who are
counterfeiting will be decapitated,” on the bills.
Citizens could take these notes to the bank at
any time and exchange them for coin value.
They could also be used to purchase goods and
The Gold Standard
The gold standard is a monetary system in
which paper money is freely convertible into a
fixed amount of gold. Between 1696 and 1812,
the development and formalization of the gold
standard began as the introduction of paper
money posed some problems. Banknotes had
been used in England and Europe for several
hundred years before this time, but their worth
had never been tied directly to gold. In the
United States, the Gold Standard Act was
officially enacted in 1900, which helped lead to
End of the Gold
Standard
The Gold Standard Ended 50 Years Ago (On
March 3rd 1933) when President Franklin D.
Roosevelt closed all the banks in the U.S.A.  He
was responding to a run at the gold reserves. he
temporarily banned the ability to redeem dollars
for gold and prohibited gold exporting and he
temporarily banned the ability to redeem dollars
for gold and prohibited gold exporting. In August
1971, President Richard Nixon formally unpegged
Development of banking
Private banks were set up mainly by businessmen
who wanted to add banking to their portfolios and
satisfied a demand. In ancient times, temples too
regularly functioned as banks. They were viewed as
the safest places to store gold as their sacred status
reduced the risk of theft and looting. Although there
are no historical records that show where and when
loans began, there are records of loans being made.
New laws gave joint-stock companies the ability to
acquire limited liability, these laws were expanded,
with banks and insurance now given limited liability
The present
Paper money and coins still exist but plastic, in
the form of credit cards and debit cards, has
proven to be the most popular monetary device
in the 21st century. In fact, according to a study
published by the Federal Reserve Bank of
Boston in January 2010, there are 609.8 million
credit cards held by consumers in the U.S. alone.
The first credit card, the Diners Club card, was
developed in 1950, making the need to carry
cash not as important as it had been.
The future
consumers will no longer need to carry paper,
coins or plastic to make their purchases! With
the upcoming launch of Google Wallet and
ClearXChange, consumers will be able to use
their handy smartphones when they’re on the go
to pay for their purchases. It’s amazing to see all
of the changes that have taken place over the
centuries. As our knowledge and technological
capabilities continue to evolve and improve,
even the smartphone apps will one day be an
Thank you! Hope you enjoyed the power point presentation
about “The history of money ” and how money changed
overtime.