The History of Money

Before money existed, people traded goods and services directly through barter. This system was inefficient, because both sides had to want what the other offered. Over time, societies adopted shells, metals and other objects as a common medium of exchange. Coins made from precious metals eventually became widespread in many civilisations. Paper money later offered a lighter and more convenient alternative. Its value, however, depended entirely on trust in the institution that issued it. Today, an increasing share of payments are made electronically. Some economists predict that physical cash may one day disappear completely. Whatever form it takes, money ultimately remains a shared belief in value.