READ: Gallery — Money

Different cultures developed various forms of currency – both as a recordkeeping device and as a medium of exchange.

On the isolated Pacific islands of Yap (in Micronesia), a currency developed that was based on wheels of limestone. As the material was not available on the Yap Islands, Yapese had to bring it over from quarries in Palau, an island chain hundreds of miles of away. Portability remains a concern: these Rai stones are sometimes up to 12 feet in diameter and weigh more than 4 tons (more than 8,000 pounds). To save on heavy lifting, Rai sometimes remained in the physical possession of an early owner even if ownership was transferred. In that sense, the stones have significant associations with memory and history and their exchange is sometimes based on a shared understanding. In fact, the value of a specific Rai stone was often tied not just to its size and craftsmanship, but to its history. Although the Yapese now use more conventional forms of money as their everyday currency, Rai stones continue to have symbolic value.

Numerous civilizations around the world have valued shells, and some have made them a form of money. Indigenous people in eastern North America prized the purple and white beads made from whelk and quahog shells, called wampum. The cylindrical beads were originally strung into necklaces and belts and used for recordkeeping. By the time European colonists arrived in the Americas, wampum had evolved into an important unit of exchange among tribes. Realizing their value, colonists began to mass produce the beads to use for trading with the Native Americans. The beads actually gained stature as a substitute for coins in mid-17th century New England but wampum’s lack of inherent value eventually doomed it as a currency. Another type of shells, cowrie, were used as currency in parts of Asia and western Africa until the middle of the 19th century.

The history of tally sticks dates back to Paleolithic times. Back then, bones were used to record numerical data, so they were as much a mnemonic device as anything. They continued in use in medieval and pre-industrial times as objects for transactional records and eventually advanced into the equivalency of money. Chinese banks issued bamboo markers instead of regular currency when money ran short during the latter 19th century and during the world wars of the 20th century.

Most historians agree that the first coins in circulation came from Lydia, in western Anatolia (modern-day Turkey). Production and circulation began around 650 BCE with the casting of electrum, a natural alloy of gold and silver, into small, irregularly shaped pieces that bore a design. The earliest example is thought to have depicted a lion and a sunburst, symbols of Lydia’s then-king. In time, standards for weight and purity were set, and the currency made its way into mainland cities in ancient Greece. Eventually electrum went out of style as coins of gold or silver became the predominant means of exchange.

Paper currency owes its origins to the dynasties of Middle Age China. In the Tang dynasty (618–907), the ruling class found it burdensome and potentially dangerous to transport heavy copper coinage to and from distant lands, so merchants began to be paid with paper certificates, called “flying cash” because it had a tendency to blow away. The notes were backed up by hard metal currency held in the capital. The Song dynasty that followed issued paper money with bank seals, officially embracing paper money as a means of exchange. The concept is thought to have traveled westward with the Mongols and, by 1661, European nations were also printing paper currency.

The Dutch guilder became the official currency of the Netherlands (or Holland) in 1680. It was replaced by the euro in 2002. The original guilder was a silver coin featuring the Greek god Athena, a good example of the lasting effect that Greco-Roman culture had on the newer nations of Europe. The first paper guilders were issued in 1814 and became an important global currency as Dutch traders and colonists sailed around the world. The notes shown here were designed in the 1980s and demonstrate the variety and graphic complexity that modern nations used to help express their identity and to protect their currency from counterfeiting.

When the euro replaced the currencies of numerous European nations in 2002, it instantly became an important global medium of exchange. The U.S. dollar, the British pound, and the Japanese yen are some of the other most prominent currencies regularly used today. Even in today’s global economy, there are still 182 different currencies recognized by the United Nations. Travelers often exchange some of their own money for that used by the country they are visiting.

Credit cards are one of the most common forms of payment today. Individuals and companies using cards are able to make or receive payments without exchanging actual money. The cards link transaction amounts to certain identities. Individuals and businesses are responsible for covering their charges while the merchants receive payment from the cardholders' banks. The banks who issue credit cards calculate exchange rates when a transaction involves currencies from different nations. Often, credit card users pay fees and incur interest when they let purchases accumulate or when they borrow money “against” their card. The earliest forms of credit cards were introduced in the early 1900s as a way to secure customer loyalty. These cards were only accepted at the businesses that issued them. It wasn't until 1950 that the Diners Club Card became the first modern, multi-use "charge card."

Nowadays, many transactions can be completed through the Internet by portable devices like phones and tablet computers. Merchants can run a customer's credit card through a reader like the "Square" shown here and instantly process a payment. That same customer might make a number of charges online and in-person, receive a paperless bill from the credit card company, and process payment online. Hundreds, thousands, or even millions of dollars might be spent without a single exchange of coin.