money & economicsWikipedia
Money began as a way to avoid barter, and its forms have shifted from commodities to paper to accounts
The history of money is the story of systems for exchanging goods and services. Without money, trade relies on barter, which requires a buyer who has exactly what the seller wants. Money solves this by serving as a medium that is accepted indirectly, so people can sell for money and later buy whatever they need. Money has taken several forms. Commodity money has intrinsic value, such as gold or silver coins. Representative money is legally exchangeable for something valuable, such as a banknote redeemable for metal. Fiat money has only nominal value and is accepted because the government declares it legal tender. Money can be physical, like coins and notes, or exist purely as a written or electronic account.
Barter fails because two people must each want what the other has at the same moment. A medium of exchange breaks this bind by letting one trade become two: sell for money, then buy with it. Money works only while people trust that others will accept it, which is why its value depends on either a physical good or the credibility of an issuer.
Each form of money carries different trust requirements, from the value of the metal itself to the credibility of a government. Knowing the categories explains most modern debates about currency, banking and inflation.
Money has changed form repeatedly, from shells and metal to paper and digital balances. Each shift has come with new questions about trust and backing, which still shape debates about currency today.
Government-issued paper banknotes first appeared in China during the 13th century.
From Wikipedia, the free encyclopedia · text CC BY-SA 4.0
Illustrative photo · Rangan Datta Wiki, CC BY-SA 4.0, via Wikimedia Commons
