Imagine that you want a toy, but instead of paying for it with money, you have to exchange it for something else – for example, for three apples or two chocolates. But how do you find someone who is willing to do that? It’s not easy, is it?

In fact, that’s how it was thousands of years ago. Back then, people would exchange what they produced with each other. For example, a pot of milk for two fish or five bags of rice for one goat. Such an exchange – of one good for another – is called barter.

However, in order for two people to exchange goods with each other, each of them must want what the other is offering and agree that the things have the same value, i.e. are equally valuable to them. But what if they don’t? What then should the man with the rice do if he does not want to exchange it for a goat because he needs a new cloak? Or what if the man with the goat wants not five but six bags of rice? Because of these difficulties of barter, people began to look for other ways of exchange. Most scientists assume that money originated from barter. But some have a different opinion. Let's see what happened later with barter.

 

The emergence of money

Gradually, people discovered that they could exchange different goods with just one. Everyone had to consider it valuable, durable, and easy to divide. One example was salt. It could be used to measure out an exact amount, and it was not only durable, but also increased the shelf life of other products. For these reasons, and because it was used to season and preserve food, everyone needed it. It did not really matter what the good was. People around the world have used a variety of things over the centuries—sea snail shells, beads, cocoa beans.

In this way, instead of exchanging goods, people could pay with this “money”, because everyone accepted it. This way it was much more convenient to buy what you needed! Undoubtedly, carrying a few shells to pay for rice was much easier than carrying a goat behind you.

The problem, however, is that in order to exchange such a commodity for something of high value, huge quantities were needed, which were difficult to transport and store. Therefore, other solutions appeared - for example, instead of 200 kg of salt for your goat, a person could receive a small piece of silver. And with it, he could then buy exactly what he needed. The “ancestors” of modern money appeared. Initially, people used pieces of precious metals - gold, silver, copper, which were always valuable, since they were in limited quantities and their extraction required time and money. Since ancient times, jewellery has been made from them, with which people could show their position in society. Today, these metals are also used in expensive and precise technologies such as computers, telephones, and in medicine.

Pieces of precious metals were of different sizes and levels of purity. This also made exchange difficult, because it was necessary to check the content and cut exactly the required amount each time. That is why later the first real coins were minted from gold and silver, and then from other metals. They had a precisely defined value - weight and content of the precious metal.

Thus, another problem was gradually solved. There were more and more people, and the goods and services they provided - more and more diverse and numerous. It became very difficult to easily compare each of them with all the others. At some point, people began to use precious metals so that they could estimate how much each good was worth - in gold, silver or copper.

In more recent times, paper money - banknotes - came into use. They were even more convenient to carry than coins. For a long time, each banknote and each coin had a clearly defined value, equal to the corresponding amount of precious metal.

Thus, with the advent of money, people began to trade much more and much more easily with each other.