I am sure many people have asked the question and found the answer but I can guarantee that still many people do not know.
So, I am going to take it step by step and start at the beginning.
1. Exchanging of items also called Barter
The paper that we carry in our wallets everyday did not exist by itself is goes back very long time ago with a lengthy and rich history.
In 6000 B.C people exchanged items for items for example 1 fish for two hands of grain. Any items that where exchanged with something else (Barter) was exchanged in their original form, meaning the fish would still be alive or raw and the grain would be unprocessed.
2. Commodity Money
Some items had more value due to the advantages and the type of item.
For example, Cattle was a very good commodity money due to the fact that it can transport itself, it can produce milk and it can be used for the meat, therefor due to the advantages of cattle they had more value that fish or grain except that the cattle could get sick and there would not be any use for it.
At a later stage Commodity money was becoming unpractical, because of the changes and differences in their values.
3. Metal
When human kind discovered metal, everything that was always made of stone and rock was replaced with metal, metal had so much more advantages because it was easy to keep safe, easy to transport and it was considered as very beautiful. In the begging of Metal, it was exchanged in its natural state up until mankind found that you can heat it up and melt it in different shapes and sizes. Like jewellery.
So, in order to make transactions more hassle free, the metal had to be weight according to the purity the weight was different. At a later stage the metal was shaped and the person who was the original owner of the metal had to stamp his name on it.
4. Money in the Form of Objects
So, by this time metal items became high valued commodities. Now it required production and the person had to know how to melt the metal, it was also a great challenge on where to find metal in the nature and how to get hold of it, and obviously not everybody had the means of obtaining and digging for metal and to process it.
Because different people where mining and obtaining metal each owner of the metal had different ways to shape their metal in order to present him. People used different logos on their metal shaped items like animals or someone in a good political state will put a logo of a face the logo where something that could present them
5. Ancient Coins
So, the first metal coins/pieces that looks similar to what we have today appeared in the 7th century B.C. They had a stamp on it that indicated who was the owner of the metal to also provide assurance of the value of the metal coin. These coins where handmade therefore there was not a similarity in the coins like we see today.
6. Gold, Silver and Copper
Then the first metals used to produce coins were silver and gold. These metals were used because of they were rare, they were beautiful and they couldn’t corrode. The production of coins continued for many years and the coin was guaranteed by the physical value
7. Paper Money
Paper money started in 1810, and the value of the paper was written by hand, very similar to our personal check books today. Then paper money went through the same process that metal coins where the movement came to notice that there needs to be similarity to paper money in order to have control over it.
8. Monetary System
So, in each country today they have their unique coins and paper money, and this money comes from the monetary system of each country, this system has to be in place to ensure the money is monitored, controlled and complies to legislation. All the money of each country is controlled and monitored by their central banks
9. Checks
To make transactions even more easy and hassle free the check book was created. It was created due to a number of good reasons one of being, easy to carry with you, easy to pay a merchandiser any amount (As long as the funds are available in your account) it is also fairly cheap to produce and no one can use a check if not signed by the owner of the check book.
To wrap up this session, it is important to understand that money was not created by a super clever guy, but it was created because there was a need for it. Reference
Thank you for reading
