The origin of money

Money, we all know it and we all have it. Some more than others. Some people spend it faster than others. But what many people don’t know is how the concept of ‘money’ originated, coins, bills and the debit card. Next time you’ll know what you’re spending. First there was coinage, which arose from barter. In exchange for larger amounts, the goldsmith gave a letter with the value of the money, in this way the letter money was created.


In the past, people had no money. They made things, and if they wanted something different, they traded it. If you were a butcher, you could trade a steak with the baker for three loaves of bread. It was very laborious, how much was a steak worth? If you were a carpenter, and you would have made a carriage. What do you exchange that for? 100 loaves? People started traveling further and further. On these long journeys they met people who had completely different products. They started exchanging these products for their own products. To make it easier to exchange with people who lived further away, people took gold and silver with them. This was also not convenient, as the gold had to be weighed again and again to determine its value. That’s why coins were made. Each coin was the same weight, so the value was equal. The problem was that these coins were easy to tamper with. People shaved off a bit of the edge around the coin. They used the shavings they saved to make new coins. This problem was solved by giving the coins ribs on the side and texts were also added. If you looked at the side of the coin and there was no text on it or the ridges were gone, you knew the coin was no longer good.


Coins are useful for smaller amounts, but if you want to buy the carpenter’s carriage, you will need a bag of coins. That is not very useful. People who had a lot of money left their money for safekeeping with a goldsmith. In exchange, the goldsmith gave a letter stating how much gold they had handed in, the name of the person who handed in the money was on it so that criminals could not do anything with the letters. There was no need to have a name on the notes. Everyone who handed in that note to the goldsmith received their money. These notes could be given to anyone: banknotes are a fact. The goldsmith received more and more coins. He no longer handed out letters, but banknotes. He became a banker. But every small bank had its own notes. The notes could easily be counterfeited. The government had to intervene. The government appointed a bank: the central bank. This bank bought all the coins from bankers. These bankers received banknotes instead. This money was the same for everyone. These notes had a fixed value and if you wanted, you could pick up your gold at the central bank. The banknotes were also counterfeited. But this is a lot more difficult than with coins. Notes contain all kinds of technical things that make it difficult to counterfeit notes. Nowadays, coins are no longer counterfeited, because the costs are much higher than the profit.

The debit card and ATM

The first note issue that resembled our ATM dates from 1939. It was located at the City Bank in New York and was built by Luther George Simjian. Customers simply did not want to use the device, so it was removed again after six months. The further development of the cash machine did not come until 25 years later. John Shepherd-Barron developed the first electronic payment terminal in 1967. It was used at the Barclays bank in Enfield Town (North London). The first ATMs arrived in the Netherlands in 1976. The ATMs belonged to Gemeentegiro Amsterdam. The first debit cards with magnetic stripe and PIN code were also issued in that year. These cards were then called ‘money cards’ and were silver with blue letters. The ATMs could be used by all customers of Gemeentegiro Amsterdam. The debit card became increasingly popular, and more and more ATMs were added. The devices were easy for the customer and the bank, it saved both parties a lot of money. A little later you could also pay by card in shops.

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