Money is historically an
emergent market phenomenon establishing a
commodity money, but nearly all contemporary money systems are based on
fiat money.
[4] Fiat money, like any check or note of debt, is without intrinsic
use value as a physical commodity. It derives its value by being declared by a government to be
legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".
[6] Such laws in practice cause fiat money to acquire the value of any of the goods and services that it may be traded for within the nation that issues it.
Etymology
The
word "money" is believed to originate from a temple of
Juno, on
Capitoline, one of Rome's seven hills. In the ancient world Juno was often associated with money. The temple of
Juno Moneta at Rome was the place where the mint of Ancient Rome was located.
[10] The name "Juno" may derive from the Etruscan goddess
Uni (which means "the one", "unique", "unit", "union", "united") and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique).
In the Western world, a prevalent term for coin-money has been
specie, stemming from Latin
in specie, meaning 'in kind'.
[11]
History
The use of
barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.
[12] Instead, non-monetary societies operated largely along the principles of
gift economy and
debt.
[13][14] When barter did in fact occur, it was usually between either complete strangers or potential enemies.
[15]
Many cultures around the world eventually developed the use of
commodity money. The Mesopotamian
shekel was a unit of weight, and relied on the mass of something like 160
grains of
barley.
[16] The first usage of the term came from
Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used
shell money – often, the shells of the
cowry (
Cypraea moneta L. or
C. annulus L.). According to
Herodotus, the
Lydians were the first people to introduce the use of
gold and
silver coins.
[17] It is thought by modern scholars that these first stamped
coins were minted around 650–600 BC.
[18]
Song Dynasty Jiaozi, the world's earliest paper money
The system of
commodity money eventually evolved into a system of
representative money.
[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors – redeemable for the
commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or
banknotes were first used in
China during the
Song Dynasty. These banknotes, known as "
jiaozi", evolved from
promissory notes that had been used since the 7th century. However, they did not displace commodity money, and were used alongside coins. In the 13th c
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