The Basics of Money

What is Money?

The answer to the question is simple. Money is anything widely used for paying debts owed by an individual to somebody else and also for receiving the payments of debts due to an individual from somebody else . A country produces coins and banknotes, (accepted by everyone) for the payment of bills and for the receipt of cash owing.

Money is what's referred to as a "medium of exchange".

In the "old days" people traded the products and services they owned (and probably produced) for goods and services owned by others (probably produced by them). The scenario went something like this - "you give me two sacks of your potatoes and that i will trade you ten of my fish".

This method of trading was fine for a short time . As society developed, business became more cumbersome and inefficient with this method of trade. Business dealings became stilted and slow and lagged behind the new pace of commerce. There had to be a better way. Some bright spark then came up with the thought of a standard "medium of exchange" easier to hold around and better to use.

Money was born.

It wasn't that straightforward , because while all kinds of things were used as a medium of exchange, these were all basically called "money" and it wasn't until coins and paper notes were developed that cash as we all know it today became the quality accepted as a medium of exchange.

Forms of Money

There are various sorts of money - cheques, IOU's, credit cards, bank drafts or gold. Gold was the quality utilized in the past due to its scarcity and its qualities. Gold is resistant to corrosion or damage. These unique properties, also because the scarcity of gold means even today, wealthy people round the world would rather keep their wealth in gold holdings than in the currencies of nations which are subject to inflation.

In fact, all kinds of things are used as money throughout the ages. Some include: beads, eggs, salt, pigs, leather, yarn, axes, ivory and jade. Today we've another sort of money, which can't be touched, and yet it as real because the tangible coins we are ready to touch. This form of money is electronic money.

The Name "Money"

The word money comes from the Roman goddess - Moneta. Apparently coins were minted in her temples and issued to the planet , because the Romans knew it at the time. The Latin word "Moneta", (meaning mint or coins) came from the Old English word "mynet" (meaning coins or money) and from this came English word "mint".

Origins of Money

To understand the origins of cash we've to travel back to a time well before money came on the scene. Money didn't suddenly appear - it had been introduced gradually in response to the wants of human needs. As civilization grew and expanded beyond local societies, the necessity to exchange the products provided by various groups became evident. The hunter needed to exchange with the farmer, the shepherd needed to exchange with the drugs man etc.

The medium of exchange that was necessary to enable the varied groups to barter and swap their products was money. It was originally a physical substance like gold or silver. Sometimes it had been a substance that was alive like cattle, which was one among the oldest sorts of money.

Today, although much of the cash employed by individuals within the ir lifestyle remains in the sort of notes and coins, its quantity is comparatively small compared to the intangible sorts of money existing as entries in bank records.

Today money exists within the sort of digital cash and such things as coins and bank notes will soon become obsolete. When this happens, the change within the nature of cash will have a big effect on our society.

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