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People can purchase political or even military power because it is always passed through families.
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Currency seems like a very simple idea. It's only money, after all, and that's just what we use to buy the things we want and need. We get paid by our employers, and we use that money to pay tile bills, buy our food, and purchase goods and services. We might put some in a savings account at the bank or invest it in stocks or real estate, but for the most part, currency seems like a fairly straightforward concept.
In fact, the development of currency has shaped human civilization. Currency has' stopped wars, and it has started many more. Cities and nations as we know them would not exist without it. It is difficult to overstate the importance of currency in modem life.
Currency as Substitute
Currency, or money, can be defined as a unit of purchasing power. It is a medium of exchange, a substitute for goods or services. It doesn't have to be the coins or bills with which you're probably most familiar. In fact, through the ages, everything from large stone wheels, knives, slabs of salt, and even human beings have been used as money. Anything that people agree represents value is currency.
For example, if you have one barrel of wheat, and you want a cow, without currency you have to find someone who not only has a cow, but also wants a barrel of wheat and will agree to the trade.
Now, if you live in a place where round, stamped coins are widely considered to have a certain value and can be exchanged for other things, then you just have to find someone who needs wheat. That person will take the wheat in exchange for an agreed-upon amount of coins which you can later use to buy a cow from someone else.
Currency as Wealth
Besides serving as a substitute in trades, money's other important use is as a store of wealth. In a straight barter system, the commodities being traded are generally perishable. You can gather tons and tons of wheat by making shrewd trade deals, but if you try to save the wheat, it will eventually go bad. Money allows people to accumulate wealth.
This had an enormous impact on civilization, because it meant that power wouldn't always be passed through families. People who had been excluded from any possibility of holding political power could amass wealth through trade or by providing a service. That wealth could then be used to purchase political or even military power. So money made civilization more democratic by taking some power out of the hands of noble families that had monopolized it for hundreds of years.
Forms of Currency: Commodity
The forms and functions of currency have changed over the last 3,000 years or so, generally falling into four categories:
Commodity currency
Coins
Paper money
Electronic currency
Commodity Currency
The development of commodity-based currency systems represents more of a blurring between barter systems and later currency systems than a revolutionary change. In a commodity system, the money used is not only a "place-holder" for purchasing power, but it is something that has an inherent value by itself.
A good example of a commodity system is the one used by the Aztecs. They placed great value on cacao beans, which could be used to make chocolate. The beans were small and easy to carry, so they were often used to balance out or make change in barter agreements.
Forms of Currency: Coins
The first coins were minted in Lydia, an ancient empire in the area of modem Turkey. The Lydian king Croesus started making small metal ingots stamped with an imperial emblem around 640 B. C.
This Lydian custom spread to the Greeks and eventually to the Romans. Coins were usually made of silver or gold, and their value was enforced by the authority of the government that issued them. If the Athenian officials declared that all coins minted in Athens,
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In history human beings, as well as many other things, have served as money.
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