A Ridiculously Brief Look at the History of Currency

by Bhaj Townsend

The ancient Chinese used cowrie shells. Babylonia used two types of currency at the same time: barley in towns and villages and silver (shekel) mostly in their cities. Silver and cattle were used by the Jews. Greece used ox and silver. The Persian Empire used both animals and gold. Copper and bronze were introduced by Rome in the 3rd and 4th Century BC.

Coined money is believed to have had its first use in Lydia around the 7th Century BC.

By the 3rd Century A.D., the metals in the coins were so minimal that the coins’ value was minimized. This allowed gold to rise in value.  Gold became the standard bearer in the 4th Century A.D. But gold was heavy, not yet found in great quantity, and difficult to transport.

Because metal transport was heavy, it stayed local.  Bronzed axes in Gaul, cattle in Germany and iron swords in Britain were common local currencies.

Wampum was a common unit of currency between the English and Dutch in the new Americas. Tobacco notes were issued when wampum beads were discontinued and metals such as gold and silver were hard to come by.

Gold eventually became the standard of measurement for most currency, especially paper money. Its purity could be measured. Its size could be easily managed. Until recently, there had to be a ratio of gold to the currency in circulation.   Today, most currency is pegged to the US dollar which is backed by “the full faith and credit” of its government.