![OIP.jpg](https://cdn.steemitimages.com/DQmenfcbGcuh9UN1ND83zQEa1nWc9x4aKr4fEPt2raHWiUv/OIP.jpg) [image source](https://i2.wp.com/marketbusinessnews.com/wp-content/uploads/2017/12/gold-standard-definition-and-pros-and-cons.jpg?fit=799%2C661&ssl=1) https://cdn.steemitimages.com/DQmSjDPtfFMq8zTUucyzT3ic8xB9Q7VSbBBw29B8E8Mdp8L/RGgukq5E6HBM2jscGd4Sszpv94XxHH2uqxMY9z21vaqHt22h1up7hhkggLs5S8TnejS1FT623qtaPkig8mUHkC9cCGUxor1pF3UPpQRZBR68RpZ2JBidfcdbL7hod1g.png

Introduction

https://cdn.steemitimages.com/DQmSjDPtfFMq8zTUucyzT3ic8xB9Q7VSbBBw29B8E8Mdp8L/RGgukq5E6HBM2jscGd4Sszpv94XxHH2uqxMY9z21vaqHt22h1up7hhkggLs5S8TnejS1FT623qtaPkig8mUHkC9cCGUxor1pF3UPpQRZBR68RpZ2JBidfcdbL7hod1g.png Hello everyone , my greetings to you all. hope everyone is great. I want to use this article to talk about the evolution of money or simply how people started interacting with each other when it comes to money. INTRODUCTION Money is the most important invention of modern times. It has undergone a long process of historical evolution. Human beings passed through a stage when money was not in use and goods were exchanged directly for one another. Such exchange of goods for goods was called Barter Exchange. this rings me to talk about the different stages of the evolution of money. https://cdn.steemitimages.com/DQmSjDPtfFMq8zTUucyzT3ic8xB9Q7VSbBBw29B8E8Mdp8L/RGgukq5E6HBM2jscGd4Sszpv94XxHH2uqxMY9z21vaqHt22h1up7hhkggLs5S8TnejS1FT623qtaPkig8mUHkC9cCGUxor1pF3UPpQRZBR68RpZ2JBidfcdbL7hod1g.png # STAGES OF THE EVOLUTION OF MONEY Bartering system In trade, barter (derived from baretor) is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. A barter system is an old method of exchange. This system has been used for centuries and long before money was invented. People exchanged services and goods for other services and goods in return. The value of bartering items can be negotiated with the other party. Things like Livestock, Skills and Talents, people and salt bartering system.jpg image source https://cdn.steemitimages.com/DQmSjDPtfFMq8zTUucyzT3ic8xB9Q7VSbBBw29B8E8Mdp8L/RGgukq5E6HBM2jscGd4Sszpv94XxHH2uqxMY9z21vaqHt22h1up7hhkggLs5S8TnejS1FT623qtaPkig8mUHkC9cCGUxor1pF3UPpQRZBR68RpZ2JBidfcdbL7hod1g.png # Why was the bartering system so flawed? image source The Bartering system had some issues which include; • Having something that no one wanted • Limited shelf life • Fair exchange • Transportation and storage • Hard to repay debt 1.Commodity system Commodity money(system) is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves (intrinsic value) as well as their value in buying goods. This is in contrast to representative money, which has little or no intrinsic value but represents something of value, and fiat money, which has value only because it has been established as money by government regulation. Examples of commodities that have been used as media of exchange include gold, silver, copper, salt, peppercorns, tea, decorated belts, shells, alcohol, cigarettes, silk, candy, nails, cocoa beans, cowries and barley. Several types of commodity money were sometimes used together, with fixed relative values, in various commodity valuation or price system economies Some commodity systems which exist before include; • Ancient China, Africa, and India used Cowry shells • Trade in Japan was based on the Koku- a unit of rice • The Shekel was a specific weight of barley • Yap stones Commodity-Trading.jpg image source 2.Metallic Money Coins are money made from metals. In the past, coins were sometimes made from valuable metals such as gold and silver. Today, most coins are made with some combination of copper, zinc, and nickel. Some significant to these change from the bartering system to coins include; • People could actually trade what they wanted for what they needed • Coins were also easier to transport • Uniform coins And some setbacks they face were; • Coin’s weight could change over time • Coins could be counterfeited • Coins were also very heavy to carry coins.jpg image source 3.Paper Money The Chinese inverted paper money in the form of notes, or IOUs. Paper bills were first used by the Chinese, who started carrying folding money during the Tang Dynasty (A.D. 618-907) mostly in the form of privately issued bills of credit or exchange notes and used it for more than 500 years before the practice began to catch on in Europe in the 17th century. China invented paper money during the Tang Dynasty that ruled between 618 and 907, and they used this currency for a long time before it found its way to other countries. ... Being shrewd business people, the Chinese found the weight of the coin money to be cumbersome and figured that printed money would be more efficient paper money.jpg image source 4. Paper Money The Chinese inverted paper money in the form of notes, or IOUs. Paper bills were first used by the Chinese, who started carrying folding money during the Tang Dynasty (A.D. 618-907) mostly in the form of privately issued bills of credit or exchange notes and used it for more than 500 years before the practice began to catch on in Europe in the 17th century. China invented paper money during the Tang Dynasty that ruled between 618 and 907, and they used this currency for a long time before it found its way to other countries. ... Being shrewd business people, the Chinese found the weight of the coin money to be cumbersome and figured that printed money would be more efficient ![paper money.jpg](https://cdn.steemitimages.com/DQmfYgXgUgfJCQAcfgQwtdPVw4ZMabfGbfKsL18u11tZapm/paper%20money.jpg) [image source](https://th.bing.com/th/id/R.8bddfedac3805ccc26f0e39f5adcaafa?rik=%2bIK4Un70JTcOMA&pid=ImgRaw&r=0) 5. Gold standard The gold standard is a monetary system where a country's currency or paper money has a value directly linked or backed by gold. With the gold standard, countries agreed to convert paper money into a fixed amount of gold. A country that uses the gold standard sets a fixed price for gold and buys and sells gold at that price. That fixed price is used to determine the value of the currency. For example, if the U.S. sets the price of gold at $500 an ounce, the value of the dollar would be 1/500th of an ounce of gold. The gold standard is not currently used by any government. Britain stopped using the gold standard in 1931 and the U.S. followed suit in 1933 and abandoned the remnants of the system in 1973.1 The gold standard was completely replaced by fiat money, a term to describe currency that is used because of a government's order, or fiat, that the currency must be accepted as a means of payment. In the U.S., for instance, the dollar is fiat money, and for Nigeria, it is the naira. ![OIP.jpg](https://cdn.steemitimages.com/DQmenfcbGcuh9UN1ND83zQEa1nWc9x4aKr4fEPt2raHWiUv/OIP.jpg) [image source](https://i2.wp.com/marketbusinessnews.com/wp-content/uploads/2017/12/gold-standard-definition-and-pros-and-cons.jpg?fit=799%2C661&ssl=1) Some advantages to the gold standard include; • Most people were familiar with it • Naturally occurring material • Kept inflation in check • Fixed exchange rate Disadvantages of this system include; • Gold had to be free flowing • All countries needed to maintain money supply to fixed quantity of gold • If there was a net transfer of currency from one country to another gold would have to follow 6. Floating exchange rate system A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies. This is in contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate. Floating exchange rates mean that currencies change in relative value all the time. For example, one U.S. dollar might buy one British Pound today, but it might only buy 0.95 British Pounds tomorrow. There are two types of currency exchange rates—floating and fixed. The U.S. dollar and other major currencies like Euros and pound (GBP) are floating currencies—their values change according to how the currency trades on forex markets. ![R.jpg](https://cdn.steemitimages.com/DQmdkjbq6cEt67XEmh6nfp82eWMBL3vHHATpqb5TqmzxTUr/R.jpg) [image source](https://i.ytimg.com/vi/1Gs1KrTBIBM/maxresdefault.jpg) https://cdn.steemitimages.com/DQmSjDPtfFMq8zTUucyzT3ic8xB9Q7VSbBBw29B8E8Mdp8L/RGgukq5E6HBM2jscGd4Sszpv94XxHH2uqxMY9z21vaqHt22h1up7hhkggLs5S8TnejS1FT623qtaPkig8mUHkC9cCGUxor1pF3UPpQRZBR68RpZ2JBidfcdbL7hod1g.png

Conclusion