# History of the Money

The coin actually has a rather recent origin when compared with the history of humanity. Before the introduction of a cash payment system, each transaction took place through barter, ie the exchange of goods between two or more subjects. A method that, however, could only be used if certain precise conditions were met: the simultaneous need for goods by two or more individuals and the ability to equalize the value of different goods.

Thus it was that attempts were made to introduce **precious metals** into transactions. The introduction of the coin is historically attributed to Croesus, King of Lydia, who introduced the first bimetallic coinage. The idea of the sovereign, in fact, was to strike gold and silver coins. Barter had become a more than obsolete system and money was already beginning to prove itself as a versatile and multifunctional choice: as a means of payment, as a unit of account and as a store of value.

During the Middle Ages, the extraction of precious metals began to create many problems for the coinage system. The difficulty of extraction and above all the high costs forced medieval societies to seek an alternative solution. Starting from the sixteenth century, the first **paper coins** began to be introduced. Rather than actual banknotes, in fact, they were documents that made it possible to withdraw the corresponding amount of gold to anyone who presented them to the bank. This means that the face value of the note was equal to the intrinsic value of the deposited metal.

Over the centuries, credit institutions began to print more and more notes, without these being covered by gold deposits. And this turned the precious metal into the bank's reserve rather than the equivalent of the banknote. To respond to this situation, the **Golden System** was born. Which prevented the printing of new money in the event that this was not adequately covered by a gold reserve. The system went into crisis at the first difficulty, and the First World War certainly did not prove to be an easy situation for anyone to face. In 1944, in fact, the great powers met at Bretton Woods to adapt the monetary system to the needs of the moment.

It was on this occasion that it was decided to abandon gold for bank reserves and replace it with the dollar. Thus, we passed from the Gold Standard system to the **Gold Exchange Standard system**: the nominal value of the dollar was thus linked to that of gold, but that of other currencies was almost exclusively linked to that of the US dollar. Banknotes and coins, therefore, were used for traditional transactions, referring to the value of the American currency. But even this system failed.

In the first decade of the 2000s there was a real revolution in the history of money. In fact, in 2009 **Bitcoin** was introduced, the first decentralized digital currency that uses the new blockchain technology. All transactions are stored in a digital ledger accessible to anyone. Cryptocurrencies allow you to have complete control over your money, as opposed to traditional money, which is controlled and issued by central banks. Over time, with more publicity and "trust" gained by Cryptocurrencies, more and more outlets, shops and businesses are accepting it as a form of payment for their services or products.
