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A 50 lari banknote from GeorgiaA 50 lari banknote from GeorgiaMoney is any object (often banknotes and coins) or record (such as on a computer screen) that is accepted as payment. Payment may be for goods and services or be payment for a debt. The money supply of a country is the total amount of money available: it is made up of the notes and coins in circulation, as well as all the money held in bank accounts belonging to individuals, companies, banks and organizations. This “bank money” consists only of computerized records rather than notes and coins. The world's first coins were probably made in around 650–600 BC by the Lydians, a people living in the region of modern-day Turkey.

European travellers and Native Americans bartering European travellers and Native Americans bartering

The first money

As long as 100,000 years ago, people were exchanging food, objects and services that they needed, sometimes by barter. Barter is a system of exchange in which goods and services are swapped for other goods and services. As well as bartering, people probably gave useful items to each other, creating a debt, with the expectation that they, in time, they would be repaid with something useful.

Cowry shells being used as money Cowry shells being used as money By around 3000 BC, inhabitants of the most advanced societies, such as in Mesopotamia (present-day Iraq and Syria), were starting to replace systems of exchange with “mediums of exchange”. A medium of exchange is a measure of value (or unit of money) that can be used in trade to avoid the inconvenience of bartering or gifts. The earliest mediums of exchange were precious commodities such as shells or barley, which were given and received as payment. Historians call these “commodity money”.


Some modern currencies are entirely internet-based, although they can be used to buy real goods and services. The largest of these digital currencies is Bitcoin, which was established in 2009 and has the equivalent of £650 million in circulation.

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