Before the invention of coins and banknotes as a form of currency, people used barter trade. Barter trade means that an individual trades his or her belongings to another individual. This was often done with cattle, i.e.; one cow for three sheep. One documented form of barter trade was between the Scandinavian and Russian traders who were bartering their wares.
One of the most well known historical barter trades were between the Indians and the Europeans. The colonists found out that Indians had gold and tried to trade worthless items for their valuables. Another great example is the spice trade between the Netherlands Indies and the VOC.
The first ideas of currency existed in the forms of; stones, shells, sticks and rings. Stone money known as Rai stones, are large, circular stone disks carved out of limestone formed from aragonite and calcite crystals. Rai stones were quarried on several of the Micronesian islands, mainly Palau, but briefly on Guam as well, and transported for use as money to the island of Yap. They have been used in trade by the Yapese as a form of currency.
While the monetary system of Yap appears to use these giant stones as tokens, in fact it relies on an oral history of ownership. Being too large to move, buying an item with these stones is as easy as saying it no longer belongs to you. As long as the transaction is recorded in the oral history, it will now be owned by the person you passed it on to—no physical movement of the stone is required.
Shell money was a medium of exchange similar to money that was once commonly used in many parts of the world. Shell money usually consisted either of whole sea shells or pieces of them, which were often worked into beads or were otherwise artificially shaped. The use of shells in trade began as direct commodity exchange, the shells having value as body ornamentation.
Some form of shell money appears to have been found on almost every continent: America, Asia, Africa and Australia. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry. This species is most abundant in the Indian Ocean, and was collected in the Maldive Islands, in Sri Lanka, along the Malabar coast, in Borneo and on other East Indian islands, and in various parts of the African coast from Ras Hafun to Mozambique. Cowry shell money was important at one time or another in the trade networks of Africa, South Asia, and East Asia.
Stick money was a less common use of currency, but one of the most commonly known variants of stick currency were the tally sticks. A tally was an ancient memory aid device used to record and document numbers, quantities, or even messages. Tally sticks first appear as animal bones carved with notches, in the Upper Paleolithic; a notable example is the Ishango Bone. Historical reference is made by Pliny the Elder (AD 23–79) about the best wood to use for tallies, and by Marco Polo (1254–1324) who mentions the use of the tally in China. Tallies have been used for numerous purposes such as messaging and scheduling, and especially in financial and legal transactions, to the point of being currency. Another less common variant of the stick currency is the Nkutsu stick made from bronze.
Long before the introduction of struck coinage into ancient Celtic Europe, copper and gold rings were used as currency by Celtic tribes and were often worn on clothing or tied together by ropes.
These particular rings, often referred to as “proto-currency”, were created in ancient Moesia (now Bulgaria). The sizes range from 10mm-40mm.
3. Ancient coins
All western histories of coins begin with their invention at some time slightly before or after 700 BC, in Aegina Island, or, according to others, in Ephesus, Lydia, 650 BC. Ancient India in circa 6th century BC, was one of the earliest issuers of coins in the world.
Since that time, coins have been the most universal embodiment of money. These first coins were made of electrum, a naturally occurring pale yellow mixture of gold and silver that was further alloyed with silver and copper.
Also, the Persian coins were very famous in the Persian and Sassanids era. Most notably, in Susa and in Ctesiphon.
Some of the most famous and widely collected coins of antiquity are Roman coins and Greek coins.
The Byzantine Empire minted many coins, including very thin gold coins bearing the image of the Christian cross and various Byzantine emperors.
A tomb of the Chinese Shang Dynasty dating back to the 11th century BC shows what may be the first cast copper money Tong Bei. Coinage was in widespread use by the Warring States period and the Han Dynasty.
Some of the earliest coins were beaten at the edges to imitate the shape of a cow, in indication of their value. Most coins are circular but some were rectangular. Also a lot of coins, especially in China had a hole through the center so they could be tied onto a string.
Some of the earliest coins to be made purely from silver and gold were the silver Dirham and gold Dinar in the early Islamic Caliphate from the 7th century.
1. Barter trade
2. Idea of currency: stones, shells, sticks, rings, etc…
3. Ancient coins
While the rest of the world had already started using coins as a form of currency more than two millennia ago, West Africa was still using a fairly primitive form of payment; the Manilla.
4. Modern coins
5. History of banknotes
6. Modern banknotes