Skip to main content
A photograph of British bank notes

The History of Money

Image Credit: | Above: A photograph of British bank notes

How did humans trade and what did they use for payment before the creation of money? Find out how the first coins were created, why paper money was first introduced and all the discoveries and social changes that led to our current monetary system.

Before money people used bartered goods as payment; animal hides and teeth. Livestock was the most valuable commodity. The word cattle comes from the Latin words "caput" and "capital" meaning property. Shells were also used; snail shells, called cowrie, were so common in Chinese trade that the original character for money was based on them. Other goods used for payment were tools, salt, beads, crops, weapons and tobacco. West African tribes traded manilas, bracelets and armbands made of copper and bronze. The Inca built a great empire without using money. Goods were provided by the state and people worshipped gold and silver as part of their religion. The Aztecs and Maya used cocoa beans or cotton cloths called quachtli.

The First Money

7th century B.C.: The first standardized coins were created in what is now western Turkey. They were made of electrum, a naturally occurring amalgam of gold and silver. In Rome, coins were minted near the temple of the goddess Juno Moneta, which gave us the words "mint" and "money". Offa, an Anglo-Saxon king, introduced the first English coin known as the penny around 790 A.D. A copper shortage forced China to introduce the world’s first paper money into circulation in the 9th century - 700 years before Europe did so. In the 1500s the St. Joachimsthal mine in what is now the Czech Republic introduced large silver coins called thaler. The Spanish version of the thaler became the first worldwide currency. The English called it the dollar, and the U.S. dollar was based on it.

Modern Money

The first U.S. government-backed paper bills were introduced during the Civil War. The term "greenback" comes from the intricate designs on these bills, meant to prevent counterfeiting. The largest bill in history was the 1946 Hungarian 100 million Pengo; the name was spelled out since so many zeroes couldn’t fit on the bill, but it was only worth $0.25! The $100,000 1934 Gold Certificate was the largest bill ever made in the U.S. It was used for Federal Reserve transactions and not released to the public. The largest coin ever minted (by Australia in 2011) weighs 2,231 lbs. A U.S. nickel weighs just 5 grams—roughly as much as a hummingbird. As of 2012, there are 167 different currencies used around the world.