Money is used for buying or selling goods, for measuring value and for storing wealth. Almost every society now has a money economy based on coins and paper bills of one kind or another. However, this has not always been true. In primitive societies a system of barter was used.
BARTER
Barter was a system of direct exchange of goods. Somebody could exchange a sheep, for example, for anything in the market place that they considered to be of a equal value. Barter, however, was a very unsatisfactory system because people’s precise needs seldom coincided. People needed a more practical system of exchange, and various money systems developed based on goods which the members of a society recognized as having value.
RAW MATERIAL OF MONEY
Cattle, grain, teeth, shells, feathers, skulls, salt, elephant, and tobacco have all been used. Precious metals gradually took over because, when made into coins, they were portable, durable, recognizable, and divisible into larger and smaller units of value. A coins is a piece of metal, usually disc-shaped, which bears lettering, design or numbers showing its value. Until the the eighteenth and nineteenth centuries, coins were given monetary worth based on the exact amount of metal contained in them, but most modern coins are based on face-value.
The value that governments choose to give them, irrespective of the actual metal content. Coins have been made of gold (Au), silver (Ag), copper (Cu), aluminium (Al), nickel (Ni), lead (Pb), zinc (Zn), plastic and in China even from pressed tea leaves. Most governments now issue paper money in the form of bills, which are really “promises to pay”. Paper money is obviously easier to handle and much more convinient in the modern world. Checks and credit card are being used increasingly, and it is possible to imagine a world where “money” in the form of coins and paper currency will no longer be used.
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