Mom, who invented money?

You are born and it's there, you grow up and become aware of what you can achieve with it, you stop being a child and discover that it's not so easy to get it. One day you stop to think about what a world without it would be like, you discover that there were other times in history when it didn't exist and you wonder why, when, and who invented money. 

Why?

In the most primitive economies, individuals were self-sufficient, that is, they did not economically interact with others. As societies grouped into larger groups, they became more complex, and people needed others to meet their needs, which led to the division of labor and the consequent exchange between individuals. This non-monetary exchange is known as barter.

Through barter, anyone could exchange a certain good for another of similar value. This system requires finding someone who wants what one has in surplus and who, in return, can offer exactly what that one wants, that is, it is necessary that there is a double coincidence of desires.

Since that coincidence was not always possible, many types of goods with a stable value were used as general means of payment. Thus, cacao, grain, maize, or salt were used as a medium of exchange, over time something more resistant and durable like gold and silver would be sought.

When and Who?

The use of precious metals as money originates in Mesopotamia (2500 B.C). Silver ingots were used by weight along with grain as the basis of a large-scale economy similar to today's commodity money-based economy.

But this system had disadvantages such as the weight or purity of the pieces used. To solve these problems, the first coinage began through a seal or mark that guaranteed the quality and weight of the pieces. The first minting occurred around 600 B.C in Lydia (Asia Minor), China, and India.

Metals were divided into small portions, some very curious ones like those used in China in 1000 B.C shaped like small knives and bronze, silver, and gold swords, these are the oldest known coins (Moneda_cuchillo).

The first ones made with gold and silver alloy appeared in Lydia (Greece) in the 8th century B.C. Each city had its own currency but King Philip of Macedon unified all of Greece and decided to issue a single currency by having his face minted on the coins. His son, Alexander the Great imposed the custom. From then on, all kings wanted to see their faces on the coins. This was the way the Romans had of knowing the face of the emperor.

Europeans were the first peoples to produce standardized and certified metallic coins, such as the Greek drachma or the Roman denarius and aureus.

Over time, coins were made with less noble metals that weighed less but were backed by a tangible asset that held the issuer's confidence. This model was institutionalized in the 19th century and is known as the gold standard.

As for the origin of paper money, some argue that it originated in China in the 7th century, being created by merchants during the Tang dynasty, between 618 AD and 907 AD. where merchants used a document as a promise of repayment, more like a promissory note than what we understand as a banknote. That's why other opinions place the origin of paper money in the same place but towards the 9th century AD. coinciding with the birth of the first banks. Paper money in Europe was first issued in Sweden in 1661, functioning as proof of a deposit. The Bank of Stockholm began to issue notes to those who stored gold or other metal in their institution. From the 18th century, the issuance of paper money became widespread in Europe, always backed by gold held by the State.

 The gold standard began to be abandoned almost a century ago, giving rise to what is known as fiat currency where the value of a particular currency (banknote) is established by the trust it generates. Thus, for example, in the case of the euro, its value is backed by the authority of the European Central Bank and in the case of the dollar by the Federal Reserve in the United States.

The emergence of electronic payment methods through a card or mobile phone is changing the current landscape and there is already talk that physical money may disappear as such.

Facing the future, a new scenario arises where virtual currencies based on the blockchain network raise questions. These currencies only exist on the web and their value is supported by a buyer and a seller who accept it for a specific transaction anywhere in the world.

The role they play in history is still to be written.