A Historical Timeline of Money

Currency or money is anything that has value and can be traded for something else. Money has appeared in different forms over the past 12000 years. We’ve evolved from using shells and coins to using digital payment systems.

In the Beginning: Barter

Barter has existed for as long as humans have been alive on Earth. Even animals barter in their mutualistic relationships. Bartering is when someone exchanges one set of goods or services for another service or resource of equal value to the recipient. Each party to the transaction is satisfied by the fulfillment of needs. The barter system is still used today.

The Barter Economy – Some economies are based entirely on the barter system.
The Barter System During the Pandemic – When cash became short, neighbors started bartering instead.

9000-6000 B.C.: Cattle

When humans became herders and farmers instead of hunters and gatherers, livestock like cattle became valuable currency. This phenomenon coincided with the dawn of agriculture. The fruits of the harvest also became useful goods for bartering.

Using Cows as Currency in Ancient Ireland – Ireland used to have an entire financial system based on cattle.
Drought’s Effect on Ethiopia’s Cattle Economy – People in rural Ethiopia still use cattle as currency and are threatened by droughts and environmental changes.

1200 B.C.: Cowrie Shells

Cowrie shells are found in the Indian and Pacific Oceans. They were used as money for the first time in China. There have been reports of trade in cowrie shells in Africa also. Cowrie shells have been used longer than any other form of currency.

More Information About Cowrie Shells – Cowrie shells were good currency because they were hard and weren’t prone to deterioration.
All About Cowrie Shells – Cowrie shells became less valuable as they became more widespread. That’s when they were gradually replaced with other monies like gold.

1000 B.C.: First Metal Money and Coins

The first metal money appeared when the Chinese attempted to imitate cowrie shells using copper and bronze. Metal tools were also traded among the people. Eventually, the common form of currency was a round coin. No one had wallets, so the coins had holes so that they could be worn on a chain or a piece of string. This made it harder to lose the money.

Metal Coinage in China – Metal coins were the primary currency in China until they were replaced by paper during the Song Dynasty.
The Wuzhu Coin – The Wuzhu coin was a form of standardized coinage to unite the feuding mini-empires of China under one currency.

500 B.C.: Modern Coinage

Modern coins were inherently valuable because they were made of precious metals like silver and gold. Silver coins first appeared in Turkey, then spread to the Greek and Roman empires. Coins were authenticated by carving images of emperors or gods into the metal.

The Croesus Gold Coin – This coin was created in Lydia, Turkey, and had the image of a lion engraved on its face.
The Drachma – The drachma was coined in ancient Greece and was used for more than a thousand years.

118 B.C.: Leather Money

Leather squares were the first banknotes. In China, they were small squares made of deerskin and bordered by colorful embroidery or beading.

Leather Currency in Europe and India – Leather money was used in Europe as a form of credit that could be redeemed for coins.
A Precursor to Paper Banknotes – Emperor Wu Ti of the Han Dynasty was responsible for issuing China’s deerskin currency.

A.D. 800-900: The Nose

Have you ever heard the expression “to pay through the nose”? People who didn’t pay the Danish poll tax in Ireland had their noses slit.

An Alternative Explanation – A less bloody theory is that the Danish occupiers of Ireland counted taxpayers by their noses.
Money and Conflict – The Danes’ unique method of reducing tax evasion was an indication of how governing powers started to resort to violence to get money from their subjects.

806: Paper Currency

Three hundred years before paper money would become widely circulated, paper banknotes were being used in China. They were used as currency for 500 years until excessive printing led to the money’s depreciation and economic inflation.

Paper Money and the Silk Road – Marco Polo saw the circulation of paper money under the Yuan Dynasty in China. It was first printed under the Tang Dynasty.
The Kwan – The Kwan is now the oldest banknote in existence today. It was printed in China during the Ming Dynasty.

1500: Potlach

Potlach wasn’t money per se. It was a Native American custom among the North American tribes. Gifts were given in a ceremony of rituals, feasting, and dancing. Because the potlach was often synonymous with initiation into a special tribal society, gifts were lavish and extravagant. There was inter-tribal and intra-tribal competition to throw the best potlach.

It’s Better to Give – The joy of giving was the basis of the potlach.
When the Potlach was Banned – The potlach was viewed as a cultural threat to the assimilation of Native Americans into European culture.

1535: Wampum

Wampum comes from a Native American word for “white”, which was the color of the beads made from clamshells. The clamshells were strung on a thread and draped in layers. Important people in the tribe wore wampum.

Wampum in America – The circulation of wampum as currency increased after Europeans arrived in the Americas.
The History of Wampum – Wampum only circulated officially for a thirty-year period, but it was always valuable to the Native Americans as wampum beads were very difficult to make.

1816: The Gold Standard

The Gold Standard first appeared in England in 1816. Each banknote represented a certain amount of gold. 1900 marked the passage of the Gold Standard Act in the United States. The Act led to the creation of the Federal Reserve as the nation’s central bank.

Reciprocal Standard – The gold standard not only tied the price of money to gold, but it set the value of gold at a fixed price.
Everything You Need to Know About the Gold Standard – During the 19th century, most western countries followed the gold standard.

1930: End of the Gold Standard

The 1929 stock market crash and the ensuing Great Depression forced the United States to revise the gold standard. Gold was devalued. As the effects of the Depression spread to Europe, other countries also started ending the gold standard. In the absence of the gold standard, foreign currency exchange rates began to govern the exchange of countries’ different currencies.

FDR and the Gold Standard – Franklin Delano Roosevelt took the US off the gold standard in 1933.
The Official End of the Gold Standard – The era of the gold standard officially ended in the US in 1971.

The Present:

Currency is constantly developing. There are new denominations and materials. Currency is also away for a nation to honor important cultural and historical icons.

The Susan B. Anthony Dollar – Susan B. Anthony was the first woman to appear on a coin.
Safer Polymer Banknotes – Polymer banknotes have anti-theft features that make them harder to counterfeit.

The Future: Electronic Money

The future is digital. One day, no one will carry money at all. Credit cards and electronic payment systems will become the sole form of currency.

The History of the Credit Card – The American Express credit card first appeared in 1958.
About Cryptocurrency: What Is Bitcoin? Bitcoin is a cryptocurrency invented in 2009. It’s traded online and exchanged for real currencies.

Additional Information on the History of Money

The Development of the Euro – The Euro is a regional currency that is used by member states of the European Union.
What Are Digital Payment Systems? – A digital payment system is any system in which a third party uses a back-end electronic transaction so that that the end-users don’t have to use cash.
Prepaid Cards – Prepaid cards are charged with money, which the user then spends through the card.
Debit vs. Credit Cards – Debit cards are linked to a checking account, and the holder can’t spend more money than the available balance without incurring an overdraft fee. Credit cards allow the user to spend money he doesn’t have and pay the balance at the end of the month.
Anti-Counterfeiting Measures – Holograms and watermarks are just a couple of the ways that central banks protect currencies from being counterfeited.
Know Your (US) Money – Learn which bills currently feature which presidents and historical figures.
Money During the Time of Shakespeare – A variety of coins were used during the Elizabethan era.
The Dangers of Unbacked Currency – Shortly after the abolishment of the gold standard, the value of the Reichmark spun out of control in an unprecedented period of inflation.
The History of the Lira – The Lira was first coined during the Ottoman Empire in 1844.
How a Currency’s Depreciation Collapsed an Empire – Without valuable currency, trade stagnated.
The Dominance of the Dollar – The US Dollar became the world’s standard currency during the Bretton Woods Conference.
Could There Be One World Currency? – One currency would make matters easier, but global inequality might be exacerbated.

This page was last updated by Steven Jefferies