Money

Money, as tokens representing wealth, developed from an ancient tradition of barter. Exchanging goods of equal value was not always practical, and early monetary tokens included amber, beads, salt, cattle, feathers and cowries (the shells of marine snails). Metal became a means of exchange in the Middle East, and in Lydia (now eastern Turkey) crude lumps of metal called ‘dumps’ were stamped with the royal crest, and thus formalized into the first coins, during the reign of King Gyges.

The first paper money was issued in China to overcome a shortage of coins, but it was centuries before promissory notes such as letters of credit and goldsmith’s receipts (which represented wealth deposited elsewhere) developed into formal banknotes. The cheque, which actually developed before the banknote, is a type of promissory note that has survived in its original form.

Cash is more than 2500 years old, but it now plays second fiddle to ‘virtual’ money in a world where an increasing number of financial transactions take place using credit cards or electronic transfers, with no exchange of physical tokens.