Commodity Money

Primitive humans led a self-sufficient economic life. With rising productivity and division of labor came bartering, which resolved the problem of supply and demand. Bartering made use of both natural commodities (such as beads, jade, leather, animal teeth and horns, and metal) and goods produced by humans (like grains, cloth, ornamental goods, and livestock).
With the diversification and increasing frequency of transactions, some commodities gradually began to play the role of medium of exchange. For example, ancient China used shells, and ancient Mesopotamia and Egypt widely used precious metals such as gold, silver, and bronze as currencies. Turtleshell and agate were also once used as currencies. However, it was difficult to control the sources of these natural commodities; their supply was limited and could not meet circulation demand. Thus, they were gradually replaced by man-made, metal-based currencies.
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