In ancient times, widely accepted, easy to preserve, and highly liquid commodities played the role of money, which is reflected in linguistics. For example, the English word "capital" comes from the Latin word for "cattle," and "salary" comes from the Latin word for "salt." The origins of these words reflect the fact that cattle and salt were used as physical currency in ancient times, and these commodities are collectively referred to as "physical currency." Physical currency has a long history, and new archaeological research even shows that early humans even widely exchanged stone tools.
As civilization developed, various items such as livestock, furs, grains, minerals, and textiles were widely used as physical currency. Even with the emergence of real money, whenever the economy encountered a serious crisis, physical currency would return, such as food, tobacco, cloth, and even electrical appliances and furniture. This method of exchange has never really left our lives.
However, the origin of real money is the development of credit and debt. With the rise of cities and the expansion of commercial activities, debt relations played a similar function to money in the social economy of the time. Commercial activities are often accompanied by gains and losses, and some merchants rely on borrowing to conduct business. In ancient laws, a large number of provisions are specifically addressed to debt problems. For example, those who are unable to repay their debts or their families may be forced to provide labor for creditors until the debts and interest are fully paid off. This is the so-called "debt slavery."
Debt slaves were the main source of slavery in ancient times, and new debt slaves were created almost every day in large cities. It was not until the emergence of bankruptcy protection laws in modern times that slavery gradually disappeared. In fact, slaves themselves can also be regarded as a kind of physical currency.
Over time, people gradually realized the limitations of physical currency, such as large size, difficulty in preservation, and poor liquidity. The indigenous people of an island in the South Pacific used a huge stone as currency, which only symbolized wealth and could not be circulated. Therefore, humans gradually limited the scope of physical objects that could be used as currency, and eventually concentrated the function of currency on very few items, mainly precious metals such as gold and silver.
However, due to the scarcity and high value of precious metals, both parties in the transaction were often worried about losses, and each transaction had to be weighed. With the advancement of smelting technology, people also learned to cheat by mixing cheap metals, so an improved version of metal currency - coinage appeared.
Coinage, that is, metal coins minted by a unified regime, overcame almost all the shortcomings of physical currency. Coinage is considered one of the most important and popular inventions in human history, and metal currency quickly spread to almost every corner of the Eurasian continent.
However, as the market economy expanded and housing prices rose, the shortcomings of physical currency became increasingly apparent. The market economy gradually overwhelmed the gift economy, which dominated primitive society and emphasized mutual gifts rather than buying and selling at a fixed price. The gift economy had low liquidity due to its complex interpersonal relationships, and although it was replaced by the market economy in the short term, its vitality remained tenacious.
The popularity of coinage made money increasingly attractive, and the shortage of precious metals in the market led to large-scale economic problems. The monetary revolution attempt originated in China, including the issuance of paper money, and eventually led to monetary innovation around the world.
The development of modern currency has far surpassed the material basis of metal. The emergence of digital currency has further changed the human understanding of currency. Therefore, currency continues to evolve and is always a symbol of human needs and desires, whether in physical form or electronic pulses.
The historical development of money has not only profoundly influenced economic life, but also promoted the evolution of culture and social structure. Money is not only a medium of exchange, but also a reflection of human social order and individual identity.
