Why does money exist? It’s a question not often pondered when digging in your pocket for a crumpled bill or feverishly clicking “Buy Now” on a phone. The rise of digital currencies like Bitcoin provokes questions about what money is and what it can be — questions, it turns out, that humanity has explored for more than 10,000 years.
Currency grew out of barter, the act of trading goods and services without a monetary medium. Dating back to 9,000-6,000 B.C., ancient peoples traded salt, tea, food and weapons.
However, barter has its limits. Consider a blacksmith in need of bread and a plumber with a taste for fish. Neither can fulfill the other’s request, so no trade occurs. This helped to spur on the development of money.
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