The origin of…Money

 “When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” Oscar Wilde

Post 4 Money

Nowadays it is impossible to imagine a world without money. It is everywhere and you nearly can´t do anything without it.

The first form of money was used in China in around 1,200 BC. where people used cowrie shells. Some think the first Chinese metallic coins were bronze imitations of cowrie shells found in a tomb near Anyang dating from around 900BC.
Although in Ancient Egypt  (from 3,000 BC onwards) no actual money existed, they developed some kind of system to value commodities and services and set prices. Workers were paid in grain and grain could be traded for other goods, of which the prices were set.
At around 600 BC the Lydians were the first in the Western world to use silver and gold coins (according to Herodotus). They used coins to expand their vast trading empire. Coins were attractive since they were durable, easy to carry and were made of valuable metals.

With the arrival of the first paper money in China around 700 AD, the system changed from one of commodity money to one of representative money. The face value of the latter is greater than its value as material substance. It was not until 1661 that the first banknotes were printed in Europe (in Sweden). Then in 1821 a formal gold specie standard was first established in England, which lasted until the outbreak of WWI. It was then restored and lasted until WWII, after which the Bretton Woods system was adopted. In this system most countries implemented fiat currencies (similar to representative money except it can’t be redeemed for a commodity) that were fixed to the US dollar. It was also agreed that 35 US dollars was equal to one troy ounce of gold. The US promised to exchange dollars for gold to other central banks. Trade imbalances were corrected by gold reserve exchanges or by loans from the International Monetary Fund. When the US government ended the convertibility of the US dollar for gold in 1971 (the Nixon shock) the system collapsed and the US dollar became a reserve currency. The post-Bretton Woods system is known as one led by the market as opposed to one led by the state. Since the crisis of 2008, some people call for a new Bretton Woods system, but so far there has not been an agreement on this issue.

Today there are new forms of money: digital money and virtual money. While the latter is used only in virtual economies, digital money is used in transactions with real goods and services.  A famous example of digital money is Bitcoin, a cryptocurrency introduced in 2008 by Satoshi Nakamoto, a pseudonymous developer.

Money:
1. something (such as coins or bills) used as a way to pay for goods and services and to pay people for their work
2. a person’s wealth : the money that a person has (source: Merriam Webster)

The English word money comes from old French monnoie, meaning coin, currency, change, money. That word comes from Latin moneta, which is a place for coining money, mint, money. The temple of the goddess Juno Moneta on the Capitoline Hill in Rome was where the mint was located.  The name Moneta possibly comes from the Latin monere meaning to warn or advise.
The Dutch word geld comes from gelden, meaning to cost, to pay, but initially it meant the payments made to the community.
The Spanish dinero and Italian denaro come from Latin denarius, which was a small silver coin, worth 10 asses (denarius means “containing 10”). Over time the word developed into a more general and abstract term meaning money.
The Italian soldi comes from Latin solidus, which was a gold coin used by the Romans. You can recognize here the English word soldier, which also derived from solidus, referring to the solidi with which soldiers were paid.Money in other languages:
Dutch: geld
Spanish: dinero
Italian: soldi/denaro

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