What Is Money?

A brief history of what we can’t live without

Money. You feel like you know exactly what it is, but when digging a bit deeper, it seems difficult to define. It is more than little green pieces of paper folded up in your pocket. It is more than the numbers that fill up the lines of your bank statement every month. To attempt to better understand what money is, I will take you through a journey through time to see what how money got to be what it is today.

Commodity Money

The first known form of money was commodity money, which has been used in countless civilizations throughout time. Commodity money has the property of being useful in and of itself as well as being used for money. Alcohol, gold, silver, candy, bronze, cigarettes, salt and barley have all been used as commodity money. Each of these has value beyond a mechanism for the transfer of value between two parties. Some of these commodities were more troubling than others as money due to storage or transportation concerns. Barley, for examples, was used between 3000 BC and 2500 BC in Mesopotamia. While barley certainly is intrinsically useful, transporting and storing it can be a problem for simple exchanges. Silver was also a dominant form of money because of its increased portability compared to barley. It is far easier to transport and store silver than barley…