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A Short And Interesting History Of Money

Money. People are worrying about it, talking about how to get more and dreaming about how to use it. Yet how much information do we really know? Keep on reading for a brief currency history.


Cowrie shells, among other natural items

Several of the first currencies were Human objects. A notable example of this is the cowrie shells, first used around 1200 BCE as currency. Even if they may seem a fairly random choice, there were a range of benefits for the shells: they were identical in scale, compact and sturdy. Although the mollusks producing the shells are found in the Indian and Pacific ocean coastal waters, the globalization of trade has meant that even some European countries adopted cowrie shells as currency.

Native Americas used the shells in the form of wampum (tubular shell beads) as currency. Another natural currency was whale teeth which Fijians used. And the inhabitants of Yap Island (now part of Micronesia) carved massive limestone disks that gradually became currencies and remain a part of the tradition of the island.

Counterfeiting

Dates of counterfeiting to invention of currency. Even wampum had been counterfeiters' target. Forgery was already proving such a big issue around the globe that strict sanctions were imposed.In the 14th century , Chinese money bore the threat that counterfeiters would be decapitated, and England became notorious for executing criminals by burning them on the stake.Death awaited early counterfeiters in the American colonies too. Numerous precautions have been taken to stop forgeries. Ben Franklin, who owned a business that printed money for many colonies, famously misspelled Pennsylvania, thinking counterfeiters with their forgeries would correct the error.

Attempts to fight counterfeiting are much more elaborate today. For example, the $20 bill — the most counterfeited note in the U.S.—has elevated printing, as well as a watermark and safety thread that is visible while the note is held to the light. Sanctions for counterfeiting have therefore eased. The current prison term in the US is a maximum of 20 years. In Nigeria, punishment entails a life sentence.

Coins

Although the use of metal for money can be traced back to Babylon before 2000 BCE, there may not have been a standardized and approved coinage until the 7th century BCE. It was at this period, according to many sources, that the Lydia kingdom (in present-day Turkey) produced the first governed coins. They existed during King Alyattes' reign (c. 610–c. 560 BCE), and were made of electrum, a natural combination of gold and silver. Such coins were crudely shaped like beans and featured the royal emblem, a lion. The son of Alyattes, Croesus (reigned c. 560–546), reformed the currency of the empire, taking in silver coins and gold coins. Soon, the currency began to appear elsewhere.

Leather money

Leather and animal hide started fashioning into money during the 6th century BCE. This form of money was probably used in early Ancient Rome. This was also used in places such as Carthage and what is now France and it is assumed that Russia used leather money during the reign of Peter the Great (1682–1725 CE). The Chinese emperor Wudi (reigned 141–87 BCE) produced currency from his own white stag collection out of the hides. It was fringed with intricate patterns and painted in. While not used today, leather money may have left a lasting legacy: some claim it gave rise to the use of buck as dollar slang.

Paper currency

Seeing that paper is generally thought to have originated in China, the introduction of paper currency by that nation is appropriate. This breakthrough is generally thought to have happened during the Emperor Zhenzong reign (997–1022 CE). It was made from the bark of mulberry trees (so actually grew on trees, in a sense). By the late eighteenth and early nineteenth centuries, paper money had spread around the globe. Nonetheless, the bulk of this currency in the conventional context wasn't money. Rather it acted as promissory notes — promises to pay defined sums of gold or silver — that were essential to bank growth.

Gold

It is not shocking that currency comes with a variety of issues, one of which relates to fiat money. It is the currency issued under a federal government's "fiat" (decree), which has no inherent value except gold and silver coins. Countries will then issue the money at will, and others have (and do) theoretically make the currency worthless. This was such a concern as to adopt the gold standard in 1821 by the United Kingdom – then the pioneer of international finance.

The basic unit of currency in this monetary system is usually held at the value of a set quantity of gold, which increases confidence in foreign commerce by avoiding unnecessary currency issuance by governments. Ultimately, the gold standard was accepted by other nations, including Germany , France and the US. The program however has its disadvantages.

Notably, it restricted the ability of a country to separate its economy from the rest of the world from deflation or inflation. Countries started to reconsider the gold standard during the Great Depression (1929–c. 1939), and gold was no longer attached to currencies by the 1970s. Many severe incidents of hyperinflation have happened since. A noteworthy example is Zimbabwe in the early 2000s, when the country released money as high as $100 trillion in denominations — which was worth around a loaf of bread.

Credit Cards

Although credit has been available for years, it was not until 1950 that the first universal credit card was launched. That year the Diners Club was founded by Americans Ralph Schneider and Frank McNamara. Many cards were quickly produced, and a plastic card debuted in American Express in 1959. We have IBM to thank for the credit card magnetic stripe which was launched to carry payment details in the 1960s. Owing to the stripe, retailers no longer had to make phone calls with credit firms to receive permission. Cards started to have chips inserted in them in the 1990s to encrypt their content, giving even greater security.

Many adjustments included balance of account. Initially credit card holders were expected at the end of the month to pay the full balance. Finally, American Express enabled borrowers to bear balance sheets — though interest was applied — and other financial institutions acted rapidly. This growth has benefitted the customers — maybe a bit too much. American customers received $1 trillion in debt by credit card in 2017.

Bitcoins

Bitcoin is a digital money system created in 2009 by a group of anonymous computer programmers known as Satoshi Nakamoto. The currency is not issued by a central bank and is not controlled, but the transactions are monitored by a decentralized computer network. Bitcoin users are anonymous, only identified by their digital wallet Identifier. Bitcoins valuation is calculated by auction, equivalent to how inventories are priced. Want to make Bitcoins? In a Mining method. This includes a computer-to - computer battle to solve complex math problems, and thus to validate transaction blocks.

That may sound easy, but it is not. It is projected that there will have to be almost seven trillion attempts before a solution is found. In the end, the winning computer's owner gets Bitcoins freshly produced, and the machine becomes more stable. The limit for the number of Bitcoins that can be produced is 21 million, and so far there have been more than 17 million.


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