Jason Gavin

  Money as a Medium of Exchange: Before the development of a medium of exchange  that is, money—people would barter to obtain the goods and services they needed. Two individuals, each possessing some goods the other wanted, would enter into an agreement to trade. Early forms of bartering, however, do not provide the transferability and divisibility that makes trading efficient. For instance, if someone has cows but needs bananas, they must find someone who not only has bananas but also the desire for meat. What if that individual finds someone who has the need for meat but no bananas and can only offer potatoes? To get meat, that person must find someone who has bananas and wants potatoes, and so on. The lack of transferability of bartering for goods is tiring, confusing, and inefficient. But that is not where the problems end; even if the person finds someone with whom to trade meat for bananas, they may not consider a bunch of bananas to be worth a whole cow. Such a trade re...

History of Money: The invention of money took place before the beginning of written history. Consequently, any story of how money first developed is mostly based on conjecture and logical inference. The significant evidence establishes many things were bartered in ancient markets that could be described as a  medium of exchange . These included livestock and grain–things directly useful in themselves – but also merely attractive items such as  cowrie shells  or  beads  were exchanged for more useful  commodities . However, such exchanges would be better described as  barter , and the common bartering of a particular commodity (especially when the commodity items are not fungible) does not technically make that commodity " money " or a " commodity money " like the  shekel  – which was both a coin representing a specific weight of  barley , and the weight of that sack of barley.   Due to the complexities of ancient history (ancient c...