HISTORY OF MONEY

A brief history of money

By JOSE RAMON RAMIREZ SANCHEZ

15

Jose Ramon Ramirez Sanchez

(Santo Domingo, Dominican Republic, 1970). English Teacher (Expert in American
Phonetics) Social Media Manager; Creator of methodologies based on natural
English language; Quality Auditor ISO 9001: 2008; Virtual Tutor; coach person;
Entrepreneur of English mixed with technology, and community leader. Being the
second of 10 children, at the age of nine years began his passion for the English
language, inspired by the films '' SATURDAY NIGHT FEVER '' and '' Grease ''. In
addition, he also had his own business, but his fondness for English begin to not
be demonstrated until much later half of his studies of Education in 2003.
Jose Ramon Ramirez has
Frederick (5) and Melanie (3).

5 children: Bryan (20), Sting (11), Russell (8),

He has worked in various schools, colleges, business school, virtual universities,

and charitable foundations. Teacher Ramirez is a fan of Virtual Education. He has
completed four technical courses and has about 450 virtual graduates in different
universities worldwide.
His motto is:
- '' The Virtual Education is not a fashion, it is a necessity of modern man. ''
- '' With the emergence of the internet, we have returned to the era of the
ancient philosophers, where we can handle different topics, for knowledge is
diversified and is constantly updated. ''
- Knowledge has no boundaries.
- Learning is Eternal.
History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,
Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 1

Also thinks that teachers today must teach English using digital resources and
technologies innovations. He believes that social networking is a perfect avenue for
language teaching due to impact. That is why the teacher Ramirez has created
about 40 sites related to English and technology on Facebook. In class, creativity,
dynamism, motivation, allowing students to use their technological tools, the use of
the images (flashcards, postcards, posters), games, twister, the leisure clubs,
social networks, online seminars and the use of video (Made by native speakers)
are the main tools for teaching English language. Currently, he works as a teacher
of English at the Technological Institute of the Americas (ITLA) in Caleta, Boca
Chica, Dominican Republic. Teacher Ramirez has his repository on Scrib platform
(5,500 views). On this platform, he has published nearly 100 academic Essays
based on different themes.

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 2

Index
1. Introduction
2. Nonmonetary exchange: Barter.
3. Aristotelian concept
4. Reviews
5. Economics gift
6. The emergence of money
7. Precious metals
8. Mesopotamia
9. Coining
10. Electronic money
11. Conclusion
12. Referencias

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 3

Fig.1. History of Money

1. Introduction
History of Money
The history of money begins around V to VII century BC to the first coinage. Money
is any object clearly identifiable value that is generically accepted for payment of
goods, services and debt in a market or what is legal tender within a country.

Since ancient times people have changed valuables, either in the exchange of gifts
or in markets where a common ticketing system is more convenient.

Not only have many goods used in exchanges that are directly useful in
themselves, such as livestock and cereal grain sacks, but merely attractive
features such as cowrie shells, were exchanged for more useful goods. This is the
case of precious metals, of which the first coins were made and that fall into this
second category.

Abstract
In the Neolithic, with the emergence of agriculture and animal husbandry,
appeared the first production economy and produced a surplus; a quantity of
goods which need not be consumed.This resulted in the ability to feed
people who did not need to work in agriculture or livestock and could devote
to produce other products, such as ceramics, and exchange the surplus
produced. This allowed the first form of trading, bartering, exchanging goods
and services directly by others. Over time, this type of exchange is
considered inefficient. With the passage of time, gold and silver were widely
History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,
Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 4

used as money because their value is accepted worldwide, and also due to
the ease of transportation, the benefits of conservation and so on. To
guarantee or certify that a piece of metal or coin contained a certain amount
of gold and / or silver coinage began, as a guarantee or certification by
recognized and respected entities (kingdoms, governments, banks), which to
Prove the weight and quality of the metals contained. Coins third of stater,
minted in the early sixth century. According to Herodotus, the Lydian town
was the first to introduce the use of gold and silver, and also the first to
establish stores change in permanent premises. It is believed they were the
first to coin stamped coins, during the reign of Gyges, in the second half of
the seventh century. Other coin minting back to Ardis II. The first coin was
made of electro (alloy of gold and silver), with a weight of 4.76 grams, to pay
the troops in a manner regulated. The reason for the pattern was the head of
a lion, the symbol of royalty. The Lydian standard were 14.1 grams of
electron, and was a soldier's pay for a month of service; This measure was
called stater.

Fig.2.The Barter.
2. Nonmonetary exchange: Barter.
For a barter system function as such is necessary that each individual desires the
good of another and that the desired quantities match their availability. Indeed, in
exchange, an individual who possesses any surplus of goods, as a measure of
grain or livestock numbers may directly exchange it for something perceived value
similar or greater value, such as a clay pot or tool. The ability to conduct barter
transactions is limited, since it depends on a coincidence of wants. The seller of
grain has to find a buyer who wants to buy grain and could also provide change
something that the seller wants to buy. There is no standard measure agreed in
which the seller and the buyer could exchange commodities according to their
relative value of different products and services offered by other potential partners
barter. System is considered expensive in terms of time and effort it requires a
double coincidence of wants, ie, individuals have to find a counterpart who want
what they offer and offers exactly what they want.
History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,
Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 5

Fig.3. The Politics 3 by Aristotele.

3. Aristotelian concept
In the book of Politics 3 (c.350 BC), Greek philosopher Aristotle considers the
nature of money. Aristotle believes that every object has two purposes, the first is
the original purpose for which the object was designed, and the second possibility
is to conceive the object as an item to sell or trade. Assigning a monetary value to
an object that otherwise would be negligible, as a coin or note, arises when the
townspeople and its partners develop the psychological capacity dipositar trust
each other and the external authority barter.

Fig.4.The Debt by David Graeber

4. Reviews
David Kinley believes that Aristotle's theory is flawed because the philosopher
probably lacked sufficient understanding of the methods and practices of primitive
communities, and thus may have formed your opinion, personal experience and
conjecture.

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 6

In his book Debt: The First 5000 years, anthropologist David Graeber argues
against the suggestion that money was invented to replace barter. The problem
with this version of the story suggests, is the lack of evidence. Their research
indicates that "gift economies" were common, at least in the beginning of the first
agrarian societies, when humans used elaborate credit systems. Graeber proposes
that money as a unit of account yet invented that unquantifiable obligation "I owe
you" becomes quantifiable concept of "I owe a unit of something." In this view,
money and credit first emerged as later acquired the functions of a medium of
exchange and store of value.

Fig. 5. The economy of the gift

5. Economics gift
The economy of the gift
In a gift economy, valuable goods and services are regularly given without any
explicit agreement for immediate or future rewards (ie, no Quid pro quo). Ideally,
simultaneous or recurring giving serves to distribute and redistribute valuables
within the community.

There are several social theories on gift economies. Some believe that the gifts are
a form of reciprocal altruism. Another interpretation is that "implied that I should"
debt and social status are granted in exchange for "gifts". Consider, for example,
the distribution of food in hunter-gatherer societies, where sharing food is a
safeguard against failure of any individual's daily diet. This practice may reflect
altruism can be a form of informal insurance, or can bring social status or other
benefits.

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 7

Fig.6. The emergence of money

6. The emergence of money
The difficulties inherent in barter led to use various goods to facilitate exchanges.
These converted into instruments of change general goods became the first forms
of money. Throughout history, we have used many types of goods as general
means of payment. Over time we have sought a stable value goods, high value
relative to their volume and available in sufficient quantities to the requirements. It
has also demanded that are easily storable goods that can be transported without
difficulty, divisible, unalterable and non-perishable.

Anatolian obsidian, used as raw material for the manufacture of tools in the Stone
Age was used as early as 12,000 BC a form of money, organized in the ninth
millennium (Cauvin; Chataigner 1998) trade. In Sardinia, where he was one of the
four main obsidian Mediterranean trade was replaced by copper and silver in the
third millennium.

Already in 9000 BC was used both grain and livestock as money or barter item
(Davies) (the first grain found is considered as evidence of the date of the preagricultural practices in the 17000 BC). The importance of grain to the value of
money is inherent in the language in which the term of a small amount of gold was
"golden bean".

In the first cases of trade with money, most utility and reliability of the goods to be
reused and re-exchange (marketing), determined their choice as an object of
exchange. So in agricultural societies, the goods necessary for the production of
cereals in an efficient and convenient way were most easily acquired monetary
significance in direct exchanges.To the extent that the basic needs of human
History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,
Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 8

existence were met, the division of labor which in turn helped create new activities
for the use of time and solve more advanced problems increased.As the needs of
the people became more refined, exchange indirectly, in the same way the
physical separation of skilled workers (bidders) of potential customers (demand)
required the use of a common medium became necessary all community, to
facilitate a wider market.

Fig. 7.
Aristotle's view of creation of money as a new thing in society is:
When the inhabitants of a country became more dependent on each other, care
about what they needed, and they had exported surplus money necessarily
entered use.

Moneta worship is recorded by Livy with the temple built in Roman times 413
(123). A temple to the same god was built in the early fourth century (perhaps the
same temple) The temple contains the mint of Rome for a period of four centuries.

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 9

Fig. 8. Precious metals

7. Precious metals
According to the above criteria, the company was selecting some metals like gold,
silver and copper as optimal to operate as real money. These metals weight
circulated in principle, in the form of nuggets, powder etc.

The circulation of precious metals unminted great inconvenience caused by

difficulties arising on the weight and purity of the law or of the parts used. Traffic
safety coinage advised initially consisted of a simple seal or mark guaranteeing the
quality and weight of the pieces. Subsequently, to prevent fraud arising from
cutting the die cutting coins coins began.

Fig. 9. Mesopotamia around 2500 BC.

8. Mesopotamia
The use of precious metals as money originated in Mesopotamia around 2500
BC. Both in Mesopotamia and Egypt silver ingots were used by weight but not as
coins. Different legal code as the Code of Ur-Nammu, king of Ur (2050 BC), the
Code of Eshnunna (1930 BC), the code Lipit-Ishtar of Isin (1870 BC) and the Code
History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,
Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 10

of Hammurabi (1760 BC) the best preserved ancient code, enacted by the sixth
Babylonian king, Hammurabi formalized the role of money in civil society, posting
payments in fixed amounts of silver pesos in debt interest... fines for crimes... and
compensation for various breaches of formal law. These codes came to reflect a
daily reality in this society, where next to silver, which was reserved for some
transactions, also the grain was used to measure the value of wages or food.

The Mesopotamian civilization developed an economy of scale based on

commodity money. The Babylonians and neighboring states developed the first
system of economics as we today in terms of the rules on debt, legal contracts and
codes of laws on commercial practices and private property. Money was not only
an appearance, but was a necessity.

Fig. 10. Coining

9. Coining
Until now had used various goods as money, consolidating the use of metals like
gold, silver and copper, for the advantages offered against other assets, using
these metals by weight. However towards the year 600 a. C. a significant novelty of
the birth of currencies while coin minting The first occurred around the year 600
occurs. C. in three places on the planet independently, in Lydia (Asia Minor), in
China and India. The metal is chopped into small portions and is marked with an
identification signal and currency whose specific function is to serve as money is
created.

From about 1000 BC, was in use in China money as small knives and swords
bronze and cast bronze replica of shells in use before this.

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 11

Fig. 11. Digital Currency

10. Electronic money
According to the definition in Wikipedia: Electronic money (also known as e-money,
electronic cash, electronic currency, digital money, digital cash or digital currency)
refers to money that either is issued electronically, through the use of a computer
network, Internet and digitally stored value systems as the case of Bitcoin, or an
equivalent means of digital payment of a particular currency.

Electronic funds transfer (EFT) and direct deposits are examples of electronic
money.

It is also a collective term for financial cryptography and technologies that permit.

While electronic money has been an interesting problem in cryptography-see for

example the work of David Chaum and Markus Jakobsson-, to date, the use of
digital cash has made relatively low level.

One of the few successes have been system Octopus card in Hong Kong, which
began as a payment system for mass transit and has been widely used as an
electronic money.

Singapore has also implemented an electronic money system for public transport
(train, bus, etc) which is very similar to that of Hong Kong and the Octopus card
based on the same type of card (FeliCa).
History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,
Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 12

11. Conclusion
Creating money
In the current economic system, money is created by two procedures:
Legal money is created by the Central Bank through the minting of coins
and printing of banknotes, is the cash. The legal amount of money is
measured by the M1. Bank money is created by private banks by book-entry
credit borrowers as customer deposits, with partial support indicated by the
minimum reserves. Normally currently bank money is created as electronic
money. The amount of bank money is measured by the different monetary
aggregates M1. The amount of money created is measured by monetary
aggregates. The current way of creating and controlling the amount of
money is inspired by monetarism.

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 13

12. References
C. J. Howgego Ancient History from Coins Psychology Press, 1995 -ISBN
041508993X Retrieved 2012-06-09
a b Ludwig Von Mises. The Theory of Money and Credit. Ludwig von Mises
Institute, 2009. ISBN 1933550554. Consultado el 06-10-2012.
S Meikle Aristotle on Money Phronesis Vol. 39, No. 1 (1994), pp. 2644
Retrieved 2012-06-05
Aristotle Politics Translated by Benjamin Jowett MIT University
N K Lewis (2001). Gold: The Once and Future Money. John Wiley & Sons, 4
May 2007. ISBN 0470047666. Consultado el 04-06-2012.
a b D Kinley (2001). Money: A Study of the Theory of the Medium of
Exchange. Simon Publications LLC, 1 September 2003. ISBN 193251211X.
Consultado el 04-06-2012.
Graeber, David (12 de julio de 2011). Debt: The First 5,000 Years. ISBN 1933633-86-7.
Graeber, David (26 de agosto de 2011). What is Debt? An Interview with
Economic Anthropologist David Graeber.
Breve Historia del dinero:
https://www.youtube.com/watch?v=5K4Wt5S9MrE.

History of Money-University of Nicosia/ByJOSE RAMON RAMIREZ SANCHEZ/Santo Domingo,

Domincan Republic/ 24-04-2015/Introduction to Digital Currency.
Pgina 14