For example most regions had a rural/ agrarian economy and could have used cattle horns. It would have represented their amount of cattle they had and therefore their actual wealth.
I think there is a small group of people in africa doing something like that with fish right now.
So why settle for metal coins?
In: Economics
It’s been a long time and I should probably re-read it to get the jist before spreading what could be a falsehood, but the best way to get the right answer is to post a wrong one, so let’s go.
One of the first forms of currency came from ancient Sumer/Ur. It was an evolution of bartering. Instead of hauling a wagon of barley to the markets and bartering for some shoes, you’d barter and once agreed, hand over a little clay token marked with the agreed upon amount eg 1lb of barley, and the person who was to receiver (the shoemaker in this case) would then seek you out to get the barley at a later time. I believe this clay token had to be broken to be redeemed, and was an agreement between the two parties eg the receiver of the barley couldn’t then hand it to someone else in exchange for a good or service, they would have to redeem the barley and then bargain for the new item.
This system is good, but over time the shoe maker realises that he has a bunch on tokens to redeem but only needs so much barley per week, so now needs to make new deals to sell his excess barley. This proves annoying. So a system where you can trade the token to someone else is devised. But the tokens can break accidentally. This poses a risk to the recipient. So something more durable is needed. Enter metal.
Metal is durable, but is labour intensive, so it is therefore expensive. So the metal needs to be worth the amount of goods being traded or you need to agree that a smaller piece of metal is worth what it says on the face of it (eg paper money is intrinsically worthless, we just say it’s worth $5 because it says it is). Thus a need for standisation is needed, and the ruler gets involved. This also works for them because it is easier to collect taxes in the form of currency and pay for things (eg soldiers/labour) in currency. Rather than having massive warehouses of barley. So the shekel is developed.
This system works, but you start to develop huge amounts of wealth. So now we start using precious metals. Things like gold and silver. These are worth their weight and can buy a lot. The idea of the British pound comes from the fact the gold that made up the coin weighed one pound.
But coins and metal are heavy. If you need to transfer a lot to the next village, you need a chest and a wagon and it’s a painful experience. So in the Middle Ages a system is made whereby you deposit your money with someone and they give you a note saying you can pull out that same amount elsewhere. Congratulations we now have banking and the beginnings of paper money. You can’t transfer this note between people as it’s only between yourself and the bank. Seems we are back to ancient Sumer.
Eventually people realise that banks are safe. And carrying paper money is really useful if you deal in large amounts. So banks start to issue notes to be used as currency. I need to buy a horse, I hand you the note that says there is the horses value of gold in the bank. You then take it to the bank and take out that value of gold.
We fast forward, and banks find holding all that gold to be annoying, so they only hold so much of it, but continue to issue notes. This isn’t too much of an issue because not everyone is going to want their gold all at once.
Then we get bank runs. I’m not going to go into this because i don’t feel I am up to it, and I’ve already gone beyond the scope of your question, but essentially banks start to collapse because they don’t have the money when all the people want all their money and gold. We get another change to paper money being worth what it says, and even though it’s meant to be worth its amount in a precious metal, good luck getting it.
In Sumer, accounting *was* often done in agrarian units (e.g. some volume of grain, number of sheep/cattle). In fact, the shekel was a value equivalent to one portion of barley. Coins were minted from silver, but there weren’t that many because silver is expensive. So if you really needed silver, you could take out a loan from the temple for coins, and pay back that debt with goats, sheep, cattle, barley, lapis lazuli, copper, wares you made, etc. Otherwise you just traded those things directly or would have the debt recorded and be on the hook to pay it back later when you have the thing to trade for (for example, you don’t have a goat to trade right now, but have a kid that will be grown-up enough in a month and would like these shoes now).
But why mint coins from silver? Well, silver is a thing that people sort of have agreed is valuable, and it’s pretty rare. It’s shiny, it looks nice, you can use it to make fancy things like jewelry and mirrors, but really it’s not very practical to Bronze-age civilization. And, a nice thing about any metal is that you can cast it into almost exactly the same shape every time, meaning you have almost exactly a standard amount of that precious metal in each coin. This simplifies exchange because now you know exactly how much silver you’re getting without having to weigh a bunch of lumps of silver. Equivalently, you can weight a bag of coins and know exactly how many coins are in it.
Another cool thing with coins is that they take a lot of equipment to counterfeit, and you can make pretty detailed and durable designs on them. That means that they represent an issuing authority, with a supply controlled by that issuing authority. If you had a Roman coin, that coin would be honored anywhere in the Roman Empire, giving it value (just like any fiat currency today). In fact, Roman coins were made from brass, bronze, and copper as well as silver and gold, and were often worth *more* than the equivalent weight of the same metal *because* of the usefulness and buying powering in the Roman empire. Bonus points for coins basically being the only way a ruling emperor could have their image known throughout their empire.
Gems, conch shells, sand dollars, goats… there have absolutely been tons of materials used as currency throughout history. But if you want every single piece of the currency to adhere to a standard shape, size, and weight, *and* you want to make it hard to counterfeit, *and* you want to put designs on it for propaganda or other purposes, *and* for it to have limited other practical use so your supply doesn’t get used up, *and* for it to be durable, metal coins are the obvious choice.
There was a great “Planet Money” podcast episode recently (might have been a rerun) that discussed why gold was such a great currency. They essentially went down the periodic table and eliminated what would be good as a currency and what wouldn’t and surprisingly gold worked out to be the best option available. Very insightful.
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