The history of money can be traced back to ancient civilizations where various forms of commodity money, such as grain, seashells, and beads, were used as mediums of exchange. In the early days of civilization, trade was conducted through barter, which was the direct exchange of goods and services between two parties. The invention of money allowed for more efficient and convenient trade by providing a common medium of exchange that could be easily transported, stored, and valued.

Over time, money evolved from commodity money to representational money, where a commodity like gold or silver was stored with a trusted third party and a claim on that commodity represented as money. The creation of bank notes and paper money during the Middle Ages facilitated further evolution of money and eventually led to the development of fiat money, where money has no intrinsic value but is accepted as a means of payment by government fiat or legal tender.