Imagine this: a robber goes into a bank and
demands some money. They give him a shell,
four goats, six tomatoes and eleven chickens.
Before the invention of coins and paper currency,*
people used such things for buying and selling.
This exchange of goods and services for other
goods and services is called barter.
Around 9000 BC people paid for goods with
animals like cows, sheep and camels. Some
societies used vegetables and plants, too. Then
in 1200 BC people in China started using shells
as money – mainly the cowrie shell. Soon other
countries began to do the same. The cowrie shell
was very successful. It was used longer and in more
places than any other currency in history.
The next development was in 1000 BC, when
China started making bronze and copper cowrie
shells. It wasn't long before the Chinese made
round coins out of metal. The very first coins
often had holes in them so that people could
pass a piece of string through them to keep them
together. By 500 BC metal coins had begun to
appear in countries like Persia and Greece, and
later in the Roman Empire. These were usually
lumps of silver with the heads of various gods and
emperors stamped on them to show they were real.
A few hundred years later leather was used as
money in China, and in 806 AD the first paper
banknotes were produced by the Chinese. It was
still many years before paper currency appeared in
Europe. Three centuries passed before it was used
in all European countries.