Why Money Exists

Money is just trading at one level more abstract.

Trade itself is pretty natural and obvious: if I grow apples and you grow wheat, we can exchange some apples for wheat and both win - if I can grow just apples instead of both apples and wheat, and you from also growing both apples and wheat we can make our land use and processes and tools and knowledge more streamlined and efficient. We can each grow more apples and you more wheat if we just do our own thing instead of having to do everything. Especially since 'apples and wheat' becomes infinite numbers of things: imagine trying to make, grow, manage and own absolutely every single thing you touch, use and eat. Even the hardiest of off-grid communes aren't clawing in mines with their hands for iron and charcoal to make their own steel for a hoe to grow their own crops, for plastics or glass windows or salt. Things come from places, and that complexity is a fractal all the way down any given rabbit hole. But what if I have apples and want wheat, and you have wheat but don't really need any apples right now? And what happens if you grow apples, want wheat and the carrot seller wants apples but you don't want carrots? The wheat seller only wants broccoli. The turnip guy will trade 5 turnips for an onion but the onion grower will only accept 10 carrots for an onion - you can see how this scales quickly to gridlock. So an intermediate medium emerges: the carrot grower can sell her carrots to the wheat grower for money at a certain exchange rate - a "price" - and that money can be used to be any of the other things because it's agnostic: money can be used by anyone for anything (or at least, more openly than a specific trader's wares).

This is incredibly freeing for us as buyers and sellers: we can make what we're good at making and can buy what we need / aren't set up to make ourselves.

a quick history

In the beginning, money was a neatly physical, if arbitrary thing - we could use smooth rocks and declare that this bigger sized one was worth more than this smaller sized one. Or wood, maybe.

These were easy to counterfeit.

So the rocks became a little more elaborate: they had holes in them. Wow! If you went to all the effort of counterfeiting a rock with a hole carved in it, you might as well just get a job.

Then we discovered copper and bronze and so on: it was harder to counterfeit coins made of metal because the work to dig up and smelt your own metal was haaard.

And we added some king's faces to the coins so we could tell our copper pogs apart from that other kingdom's copper discs. These became currencies.

Skipping right ahead, the internet happened and we get to the good stuff: modern money.