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Evolution of money

HUNTING AND GATHERING

At this stage everyone was primarily hunting and gathering for survival therefore one’s energy and skill were deemed to be their currency.  Money, as we know it today, was completely useless, if you would have given a man $5 million USD, he would have used it to fuel his fire.

With everyone being equal and no bills to pay, even the land was of no use as its potential was yet to be discovered,

Here, ENERGY equated to HARD WORK and SKILL equated to SMART WORK.


AGRARIAN AGE

Growth and change are acquired through emulation, observation and awareness. Discovering that land could be used for sowing and reaping resulted in people having produce. Producing more than they needed to survive then birthed buying other products which they didn’t have using their excess produce.

Thus, Energy and Skill had evolved into Trade-by-Barter. At this stage, money was whatever one had to exchange for what they needed based on what one produced.

However, there were limitations in the mobility of farm produce, its storage, as some produce had a short-shelf life. Logistical limitations where determining value, with finding the right quantity and someone who has what one needs becoming an issue in this barter-based system.


INDUSTRIAL AGE

Gold, copper as currency

Whilst in Agrarian level other discoveries revealed priceless minerals underneath the land e.g. oil, gold, coal etc. The discoveries sparked up a revolution which stunted the Agrarian era whilst curbing some limitations which rose in Trade-by-Barter by turning raw produce into end-product.

Trade-by-Barter changed due to the emergence of these systems and ideas resulting in copper, coin, gold being accepted as a means of exchange.

Promissory notes

Minerals as a means of exchange in Barter had limitations on mobility and storage security. Gold was universally accepted as value retainer but also needed to be secured. Therefore, paper was used as promissory notes. National currencies were accepted as legal tenders and transaction instruments based on the value of gold one had to back it up.

Thus, birthing Banking Industry, Government Reserves and Central banks whose initial role was to store gold, issue notes and carry out barter on behalf of people doing business together.

People lost the understanding of real money as their focus shifted to the quantity of paper and not the gold backing its value. Gold was then separated from paper currency meaning the latter could now be accepted as money with its own value based on trust. This marked the death of the real concept of money as people started considering the papers only as money.  Different nations having different currencies with different values made other currencies useless in other countries. From here on, one needed to go through an ‘exchange’ where one exchanges money, they have for the money accepted wherever they are visiting. Paper currency is useless without value in the exchange market of the world.

TECHNOLOGY AGE

Industrial era is dead, even though many countries still live in it. The world has become a global village with internet being the village square, giving us the TECHNOLOGY/Information Age.

Brainpower is replacing muscle power whilst Smart work is replacing hard work.

Money has again evolved; paper currency is gradually being substituted by electronic money via cards and e-commerce. Due to the limitations of paper currency, which include Storage, Security and Mobility; different forms of electronic money (bank cards, e-wallets/mobile money, digital currency) have been accepted as transaction instruments and as means of processing exchanges globally and electronically basing on the value of paper currency stored in the bank to back them.

As the evolution proceeds in a decade or more, the paper currency would have vanished and next generations will know electronic money, in all its various forms, as money just as we today recognise paper currency as ‘money’.

Credit : School of money by Olumide Emmanuel