Money has always fascinated man ever since ancient times. Money has come to become the most important thing in the world. Aristotle observed that man is a social being who established certain norms and regulations for his social interaction. Man employed money as a mode of exchange to facilitate such social dealings for his economical aspect.
In primitive societies, when people wanted to buy anything, they had to give something else in return for it. For example, if a potter wanted to buy rice form a farmer, he offered him earthenware in exchange offer rice. The farmer would accept them because he needed pots. This was called the barter system, which involved goods in exchange of goods.
During those times goods served the purpose of money. But with the development of trade, the barter system could not meet the growing demands of convenient exchange system for buying and selling. People started using token or symbolic goods in exchange all over the world. American Indians used beads of shells, Fijians used whale’s teeth and North Americans used tobacco in their exchange system. The roman army men were provided salt for their services. But when was the coin first used as currency?
The precise origin of money in the form of coins is not clearly known. According to the available sources, the earliest coins were minted in about 800 B.C. when Indians who lived in
Asia used stamped pieces of metal as a medium of exchange. Some believe that the Chinese used coins even earlier coins were preferred because they were easy to carry and durable.
The early coins were of irregular shape and were stamped with rough designs. The money value of coins depended on the value of the metal that the coins were made of coins were mostly made of gold, silver or copper because they were precious and durable metals.
The use of paper currency was known to china as early as in the 9th century but it did not develop in
Europe until the 17th century. The governments of different countries favored the use of paper currencies and coins to simplify the monetary dealings. It helped, because what mattered was the money value printed or stamped on them and not their real value. This is because the printed value on the currencies denoted their purchasing power as assured by the government. People accept a coin or currency in payment not because they value the coin itself but because they have confidence in the authority that issued it.
As coins are heavy and bulky, larger payments are made in paper money issued by the proper legal authority.