Why do banknotes have a higher nominal value than coins?
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Back in the day, coins were made of valuable metal and their value was based (roughly) on the value of the weight of that metal. One could imagine that carrying around $1 worth of silver isn’t too heavy, but carrying around $20 would get tedious very quickly.
A bank note was a solution: rather than carrying around $20 worth of silver, you make the bank carry it around and they give you a slip of paper that makes them promise to give you the $20 in silver when you return that slip. The slip of paper weighs practically nothing and takes up practically no space so you can carry a lot of them.
Money has evolved past the need to base it on precious metals but coins remain very convenient for small amounts – they’re easy to sort without any kind of scanner, so they’re useful in machines. So we keep them around, but again carrying around large dollar amounts in coins gets pretty tedious.
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