In ancient times, people used to barter with their goods, livestock, and property to get the goods they needed, until currencies were invented in 600 BC to facilitate transactions and to try to set a fair limit equivalent to the amount they really deserve, and so people kept developing trying to create easier ways to buy and sell, especially after the opening up of countries On some of them, it quickly became a political tool to control and collect taxes to support the elite and armies, but in return it promoted stability and peaceful exchanges of goods, information, services, and interactions in general throughout history.
Over thousands of years, humans moved to paper currencies, which in turn turned into digital with the start of the Internet revolution, and money remained, despite its different form, a means of exchange, a standard of value, and a storehouse of real wealth such as gold and silver, but it also began to take a form of strengthening relations between countries and strengthening friendships, and on the other hand It caused a clear distinction between social classes and countries as developing and rich.
In the past, people relied on livestock, grain, and agricultural crops as material for the barter process (Al-Jazeera)
Barter.. 9 thousand years BC
Barter is a purchasing method that relies on making the commodity a price in itself. When a person needs a specific commodity, he exchanges it with another person for a commodity that exceeds his need. For example, you need an amount of meat from your neighbor, so you exchange it for an amount of fruit.
The amount of materials used for barter was customary in each region according to the agreement of its people. For example, in one region, buying one sheep may equal 50 fish, while in another it is equivalent to 4 chickens, and each grain of apple is two potatoes, and it may be 4 in another region, and a bag of rice is equivalent to two bags of wheat. Thus, the value varies according to the rarity of the thing or how easy it is to obtain it.
In the past, the barter process applied to services as well, so the commodity was valued in exchange for the effort exerted by the other party, such as a person agreeing with another to build him a house, in return for handing him a statue he would make, or in exchange for bags of grain or heads of cattle or other things.
But the great effort and long time spent in such exchanges caused a problem at that time in transactions between people. It is not possible to evaluate the product when bartering, and the final work may not be as you expect, so it is agreed again on another barter process with another person.
Among the most famous things that were bartered on in the past is the "black volcanic stone", especially in the Stone Age, and before 9 thousand years BC, people relied on livestock, grains and agricultural crops as a material for the barter process, then certain materials were identified to be used as currencies for the purchase process, including salt, animal skins and weapons.
The oldest known bartering process dates back to the Stone Age between groups of hunters who needed to trade in order to obtain flint weapons and other tools.
A picture in Las Pinas, the Philippines, between two women who are exchanging in 2020, due to the poor living conditions in the country (French)
The central market.. 5 thousand BC
With the increase in the population and the diversity of products, the volume of exchange between people increased, so that in every village there was a common hut (similar to a central market) in which merchants handed over their goods to the administration of the central market, which in turn undertakes the task of bartering, and at the end of the day merchants and producers in general come to receive their dues after a discount debts and taxes imposed on them.
With the large increase in population and the passage of time, bartering became more difficult, and the issue of calculating debts and taxes more complex, which explains why people search for a new equivalent for this barter value.
From barley to shekels... from 5 thousand to 3 thousand BC
The shekel appeared in Mesopotamia when the simplified initial form of the idea of "origins" was established, where farmers deposited their grain in a temple recording their deposit on clay tablets, and the farmer received a "receipt" in the form of a symbol of clay (shekel) corresponding to the amount deposited, and the shekel was used at its beginning As a unit of weight, about 180 shekels represented approximately 11 grams, until it developed over time as a currency for payment.
Barley was mainly used to determine the value (the unit of account) of these symbols, and after a period of time, people began to use copper, which was quickly replaced by silver, so the temple (the financier and in control of most of the trade) determined the exchange rates between barley, silver, and others, and provided the opportunity to pay with either of them or others that it determined. .
The idea of banks previously appeared in ancient empires, including the Roman Empire (Shutterstock)
The idea of banks.. 1800 BC
The Roman Empire began the idea of banks around 1800 BC, and these banks provided loans and accepted deposits from individuals, so they were considered an initial form of the idea of contemporary banks, but they later disappeared after the collapse of the empire.
Shells.. 1200 BC
After the difficulty of barter resulting from the increase in the diversity of products and the increase in the population in general, people began to try to rely on a new and unified precious equivalent to determine the value of the basis for the barter, so they started using shells, animal furs, and even elephant tusks, and so began pricing products based on the new equivalent, for example an elephant tusk is equivalent to 100 bags wheat and so on.
This barter appeared clearly in the Americas and relied on shells of pearls and snails, and shells of deposits that spread in Africa, Europe, Asia and Australia, so the first forms of successful international trade appeared at that time, and money became a form of communication or language between people.
But with the beginning of foreign trade (export and import) between countries, the problem of the difference in the value of specific things in certain regions with other regions arose. Things of value due to their scarcity in a particular region are of little value in another region where they are abundant, which paved the way for the emergence of coins.
Emperor Yongle of the Ming Dynasty developed currencies as an alternative to barter to facilitate buying and selling (Shutterstock)
The beginnings of the coin.. 1100 BC
Humanity, along with foreign trade, needed something to agree on using with the same value, with the need for this thing to be recognized by the state or manufactured by the government in order to gain legitimacy, and also agreement on its scarcity, value, and difficulty in obtaining it in general, the most important of which is its indivisibility, preservation of wealth, and its non-perishability, so currencies appeared. mineral used by most regions of the world.
Copper, iron, obsidian (precious stones), amber, beads and lead were also used, in addition to gold and silver as coins at the time.
The beginning was from China when its people began to use small models made of bronze for the same things that they used to barter with, such as weapons and arrows, and the goal was to facilitate carrying the prices of commodities and reduce their size and danger, especially if they were weapons, and so on until they reached the size of "coins", which took the form of The vacuum disks, to facilitate their binding together in the form of bundles, were developed by the Chinese Emperor Yongle of the Ming Dynasty.
The electrum coin, which was minted during the reign of King Alyates in 600 BC, is a mixture of silver and gold (Shutterstock)
The first official currency.. 600 BC
Despite the beginning of the idea of using metal in buying and selling, the first official coinage (ingot) was the “electrum”, the coin made of silver and gold in the Kingdom of Lydia, which is now in western Turkey during the reign of King Alyates, and was made in order to pay the salaries of the army, and was sealed with different images. between different currency denominations.
And that currency stimulated trade in the country until it became the richest empire at the time in Asia.
The idea of coins in general, made of gold, silver, or even bronze, was a good choice because nations agreed on their value, and what increased their acceptance was the seals on them that gave them a form of legitimacy, such as printing the image of the emperor or a logo representing the state, so the nations circulated them with acceptance, and contributed to their spread internationally. between empires and continents.
With the development of nations and changes in the world and its political map, the need for coins increased, so the sources of minerals became limited, which made some countries reduce the proportions of precious metals in their currencies, so their value decreased, and because of the collapse of some empires, their currencies collapsed with them, which became worthless for losing their legitimacy, so the need for an alternative appeared. last.
A manuscript made of mulberry leaf in a way that proves the amount of money stamped with the name of its owner, and the scarlet color represents its legitimacy (Getty Images)
The beginnings of the paper currency .. 600 BC
Also in that period, the Chinese at the time of Emperor "Tang" began trying to find an alternative idea of currencies that would make it easier for traveling merchants between countries to save their money instead of being looted and stolen, and to lighten its burden, so they decided to replace it with a manuscript proving the amount of their ownership of money without the need to carry it.
This manuscript was made of mulberry leaf, and in a way that proves the amount of ownership of the person sealed in his name, then the owners deposit their money with one of them with the writing of a “deposit bond”, and when someone comes to this manuscript, he delivers the amount of money proven in the paper, and over the course of 5 centuries China adopted these transactions .
In order to prevent forgery and fraud, an integrated financial system was established, and a reliable authority was allocated to deposit money (the government treasury), and a scarlet seal was allocated on the manuscripts to make it difficult for attempts to forge and manipulate, which is the same method used in modern paper currencies.
After the Chinese began replacing paper currencies with cash, papers bearing a value equivalent to gold and silver appeared (Getty Images)
Paper currency and its value of gold.. 1250 AD - 1290 AD
In the period between 1279 and 1367 AD, the Chinese began to completely change their coins into paper, until they became the official money in the country, and papers bearing a value equivalent to gold and silver appeared.
The Italian traveler Marco Polo said, commenting on what he witnessed in the Chinese city of "Khan Baliq" (now Beijing), the stronghold of the money industry, "While it took chemists centuries to convert metals into gold, the Chinese turned papers into money."
After China stopped using paper money during the mid-15th century, coins once again became the most popular form of money in the country and the world.
Then, during that period, the gold coin "Florin" was also minted in Florence, which was widely used throughout Europe, which encouraged and paved the way for international trade. Polo's trip to China contributed to bringing the idea of banknotes to Europe and its application.
Italian explorer Marco Polo's trip to China contributed to bringing the idea of banknotes to Europe (Getty Images)
Banks.. 1400 m
In the Middle Ages, the concepts of banking and commercial debt appeared, which was the beginning of the emergence of lending, and Italian merchants began financing commercial trips to other merchants, and they made huge profits from it.
By the turn of the 19th century banks had become reliable organizations and the concept of fractional reserve banking (a system backing only a small part of bank deposits with actual cash available for withdrawal) began, and since individuals usually did not withdraw all their money at once, banks understood the possibility of lending more money than they had Indeed, I took a big step back in the history of money.
After the banks established credit, the bill of exchange and bonds were born, and that was a second major revolution in the rise of money.
Governments and large corporations issue bonds as a way to borrow money from a group of people and institutions much broader than banks, and over time they have become part of the global economy.
By the middle of the eighteenth century the London bond market had flourished;
As treasury bonds were the most traded securities, and they were attractive to foreign investors, especially the Dutch, this was considered a major financial expansion.
A pound note dated 1814 from Aberystwyth in Wales and Tregarrun Bank (Getty Images)
Printing the first paper currency.. 1660 AD
Europe was late in using paper currencies until the 17th century, due to its lack of conviction in them, especially in light of the availability of minerals for minting coins thanks to its colonies scattered around the world.
But the first paper currency issued by European governments was actually issued by their colonial governments in North America. Because shipments between Europe and its colonies took so long, they often ran out of cash. Rather than revert to the barter system, colonial governments issued IOUs that circulated as currency.
On the other hand, precious metals were seen as the money in the world, and they were sometimes expressed in financial paper bonds, and without that they are “fake.” The first paper currency printing process was from the Stockholm Bank in 1660, but it went bankrupt within 4 years after its inability to fulfill the value of the gold notes he issued.
In 1669, the Bank of Scotland issued paper currencies, and was able to manage the process successfully, which contributed to increasing the transition from metal money to paper money, which enhanced the volume of global trade, with the beginning of banks and governments buying currencies from other countries, so it was considered the first currency market.
Paper currencies took their value from the guarantee of the issuing governments, and not from their ability to convert into commodity money, so they took the status of "legal money", because it became a promise from the issuer to convert it into "money" whenever the holder wanted it.
And the industrial revolution contributed to the circulation of money more and more widely.
Photograph of a Western Union stock certificate circa 1879 (Getty Images)
Britain and paper currencies 1797 AD
Britain announced its introduction of the first paper currency in the world in the category of one pound and two pounds, and it counted the date of February 26, 1797 as the date for that, and the fact that theories remain to be detailed in that, so was China the first to be counted issued a paper currency or calculated for Britain that printed the form known now and then spread Globally, although the mechanism and idea were almost the same?
The shift to paper money in Europe increased the volume of international trade, so banks and the ruling classes began to buy currencies from other countries and established the first currency market.
The political stability of the governments of some European countries has affected the value of their currency, and thus the ability of those countries to trade in growing international markets.
Competition between countries has often led to "currency wars", whereby a country attempts to change the value of a rival country's currency by making its own currency worth more and making its goods more expensive, or by devaluing it and reducing its purchasing power, or even by eliminating the currency altogether.
The headquarters of the Western Union Company (formerly the Western Union Telegraph) circa 1933 (Getty Images)
Money transfer.. 1871 AD
The industrial revolution constituted a major change in the field of global money circulation, so the Western Union company began facilitating money transfer transactions and sending them all over the world.
The "golden standard" .. 1944 AD
The deposit bond soon turned into paper currencies, and the gold standard was adopted as a basis for determining the value of the currency with the “Bretton Woods” agreements in 1944 under the auspices of the United States, and the state began printing an amount of papers on the basis of what gold it owned, so the exchange of paper currencies became based on a clear and stable basis the value.
During that period, the United States emerged from World War II as a major military and economic power in the world, which gave it enough weight for the rest of the countries to accept a system that compares all currencies to the dollar, so it pledged to maintain the value of its currency stable with respect to gold, while the rest of the countries are committed to adopting the dollar as the currency backup.
Based on the agreement, the International Monetary Fund was established to ensure member countries had access to funds to help peg the value of their currencies.
Member countries contributed to the Fund based on the size of their economies, and they could withdraw from the Fund in proportion to their shares when they needed reserves to support their currencies.
The American Express credit card in 1959 was one of the first cards to spread widely (Getty Images)
The credit card.. 1946 AD
The features of the credit card began with a man working at the Flatbush National Bank in Brooklyn called John Biggies, where he provided an advantage to the pioneers of his bank through his invention of the “charge-it” card, and it was used within the local community and for specific individuals, and because it was experimental it was used in shops Specific dealings with the bank.
The method of payment was done by the customer using the card to complete the purchase process in one of the stores cooperating with the bank only by showing his card, after which the store would take over the rest of the task, and the merchant would go to the bank and deposit vouchers for purchases from the bank’s customers, then the bank would pay for them, and then an invoice would be issued to the customer later.
After that, major banks in the country, such as "American Express" and "Visa", began to introduce the invention of "Peggies" at the beginning of 1950, and "Diners Club", which started from New York, was the first experience that made its cards out of cardboard, and at that time began collecting fees from cooperating merchants, and demand increased. them with time.
Within a year, the credit card began to be made of plastic, which is very similar to the current cards, and IBM added developments that enhance the security limit, placing a magnetic strip on the back, stating the customer's basic data, expiration dates, and account number.
And I kept developing the idea and spreading it on a large scale until it was recognized globally.
Former US President Richard Nixon (right) contributed to ending the adoption of the gold equivalent (websites)
Canceling the approval of the gold equivalent.. 1971
Since the adoption of gold as a value for the amount of paper currencies printed in each country, this standard remained in place until it was canceled in 1971 when countries canceled its adoption and began dealing on the basis of confidence in the economy of the government of this country, and after the economic problems that the United States experienced in the early seventies of the last century, the American president decided Then Richard Nixon recognized the need to end this system 30 years after its inception.
After that, the value of the dollar, along with the rest of the currencies, was no longer linked to the gold standard. Rather, a new stage began, which is the "floating" stage, which means letting the currency exchange rate be determined freely according to the mechanism of supply and demand in the markets.
"Compulsory criticism" .. with the beginning of the millennium
Money that is not backed by gold or any other precious metal or any other currency such as the dollar is known as "fiat money" (currencies that governments declare legal), and the priority it has is becoming clear on a global level.
The advent of the Internet constituted a quantum leap in global money trading (Shutterstock)
The value of money is affected by many factors that can in turn affect the foreign exchange market, such as the price of precious metals such as gold, central bank credits, or the public debt of a country, and other things.
The most important factor in this market lies in the confidence raised by the currency itself, and this confidence usually depends on the general impression raised by the country and its currency, and the law of supply and demand, which makes the value of currencies change.
This is the reason why the control is exercised over the value of currencies, as it monitors the amount of money in circulation and measures are taken to devalue or increase the cost of currency as necessary.
Digital Payments.. 1997 AD
The advent of the Internet constituted another revolution in the field of money circulation, so the idea of "digital payments" appeared, which falls under electronic transfer via the Internet and electronic commerce.
With the advent of the millennium and the massive development of mobile phones, they have become, over time, mobile wallets.
Digital currency.. 2008 AD
The increase in currency printing in the market led to an increase in the value of goods and services, which raised prices due to the high increase in demand for paper currencies, so the value of paper currencies decreased, “inflation” appeared, and the existing financial system began to “restrict the movement of money” between individuals for purposes such as tax control and combating money laundering. Funds, under supervision and under the "control of a single country" over foreign transfers, which paved the way for the emergence of digital currencies to escape this restriction of control.
In 2008, bitcoin appeared, which is a cryptocurrency invented by an unknown group under the pseudonym "Satoshi Nakamoto". Transactions and verification of buying and selling operations, via what is known as Blockchain technology.
The currency is designed to transfer funds electronically from one person to another, without the need for a central authority to verify the validity of this transaction. This cryptocurrency is traded on specialized platforms at a price determined by the law of supply and demand.
And Bitcoin is not the only one, but it was the beginning of a series of other digital currencies.
The latest payment methods via NFC technology using smart phones and watches (Shutterstock)
Payment over the phone.. 2014 AD
In line with the tremendous development witnessed by the beginning of the millennium, many users demanded easier and faster ways to pay online, so Apple launched the Apple Pay service to enable them to pay their purchases via mobile, then Barclaycard followed it. ) for payment services, in a new way through a smart bracelet that can be used for electronic payment, and this is how it spread among smart device companies.
Then the Near Field Communication (NFC) technology appeared, which works as a means of electronic payment by phone, and the user can use the contactless payment technology with his phone only by bringing it closer to the "credit card reader" in stores that support its use, so the deduction is done quickly, and the fingerprint or "Face recognition" to open the card and complete the payment process.