Evolution of Money pt.2


Ken_ token2022/08/16 08:29
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Evolution of Money pt.2

A LITTLE STEP FURTHER 

After centuries of bartering man finally took a little step further. There was literally no sophistication to this evolution, it was just a quick fix to the bartering system and its lapses. Man first defined money as value, in taking a step further, they saw the need for it to be a medium of exchange, and an agreement between a group of people to bequeath value to. This gave rise to what was known as commodity money, it started out as a communal money - used within a given community. Commodities like salt, corn, oyster's shell, leather etc, were used as money in various communities.

Everyone agrees to treat the commodity as money.

They agree on a specific valuation of the commodity.

Rare commodities were mostly used.

It becomes their store of value.

They agree on a commodity with intrinsic value


The early stage of commodity money had men using things from their produce or nature as money, in most case, these stuffs were not durable and couldn't serve as a good store value. These made the use of korals, cowries and shell to become a thing. In this phase man was able to fix the issue of always carrying bulky produce for bartering. The issue of not seeing a match for bartering was also fixed, you can always buy with the communal money.


Silver, gold and metals

These gave more form and structure to what we call money today, they were greatly embraced in the latter part of the commodity money era, this was the time when man was moving from just agriculture to industrialization. Man was playing with and bending metals to his will, we had miners, iron Smiths and all, hence it made sense to make money out of rare metals, a standard weight was used for valuation, be it silver or gold - creating a standard for valuation. This was the reason why the dollar was first backed by silver and gold - they formed the foundation on which paper money thrived.

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