There is no factual history of the origin of money, but it is impossible to accept any situation beyond the following basic outline. This was first generated by Ludwig Von Mises, and is known as "the regression theorum":
At first people were self dependent, autonomous.
They slowly began to produce excess, and realized that trade would benefit them.
People slowly began trading things to one another.
However, problems arose: If you want a pickle, but only have a chicken, you would need to find a chicken-wanting-pickle-haver. Such difficulties led to INDIRECT BARTER.
People began trading their excess for things that they didn't want because they knew that other people would want them (for example: I trade my bread for peanut butter -- even though I'm allergic to it -- because the person who has shoes wants peanut butter).
Slowly, people began to decide upon a specific "medium of exchange" -- salt, gold, silver, tobacco, sea shells -- that most people wanted.
Gold and silver won out because a) most people want jewelry, b) it has "good money properties" (I have a hub that discusses these properties).
Everything beyond this point (fiat paper money) is merely an extension of this.
Please check out my "Evan's Easy Economics" articles to learn more.
Here's a question, does anyone think humanity will ever be advanced enough (even in some Dune-esque distant future) to evolve beyond currency and tyrannical resource scarcity and allocation economic systems?
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