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Concept
History of money
Summary
The history of money is the development over time of systems for the exchange, storage, and measurement of wealth. Money is a means of fulfilling these functions indirectly and in general rather than directly, as with barter.
Money may take a physical form as in coins and notes, or may exist as a written or electronic account. It may have intrinsic value (commodity money), or be legally exchangeable for something with intrinsic value (representative money), or only have nominal value (fiat money).
Money was invented before written history began. Consequently, any story of how money first developed is mostly based on conjecture and logical inference.
The significant evidence establishes many things were traded in ancient markets that could be described as a medium of exchange. These included livestock and grain – things directly useful in themselves – but also merely attractive items such as cowrie shells or beads which were exchanged for more useful commodities. However, such exchanges would be better described as barter, and the common bartering of a particular commodity (especially when the commodity items are not fungible) does not technically make that commodity "money" or a "commodity money" like the shekel – which was both a coin representing a specific weight of barley, and the weight of that sack of barley.
Due to the complexities of ancient history (ancient civilizations developing at different paces and not keeping accurate records, or having their records destroyed), and because the ancient origins of economic systems precede written history, it has not been possible to trace the true origin of the invention of money. Further, evidence in the histories supports the idea that money has taken two main forms, divided into the broad categories of money of account (debits and credits on ledgers) and money of exchange (tangible media of exchange made from clay, leather, paper, bamboo, metal, etc.).
As "money of account" depends on the ability to record a count, the tally stick was a significant development.
Official source
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