History of Money & How It Is Made
Manufacturing money. It’s valuable business! But how does it work? How did money come about, and exist as a certain value – where does it come from? The machines that create the physical coins and notes have evolved over many years, and the creation of money is strictly regulated to keep our economy on track. After all, it doesn’t just appear from your local cash machine dispenser – it has to be created!
The first physical monies came into existence around the 7th century BC, where raw materials were mined and manufactured into coin form. With limited resources the design and production of coins was complex, and every coin, of each set denomination, had to be identical in size and weight to ensure people accepted they were worth the same. It wasn’t until the seventeenth and eighteenth centuries that money was made using steam powered machinery. These new methods proved to be slower and less accurate, than traditional methods, and the switching to machine-striking coins was a gradual process. Despite this, once the new machines were deployed efficiently, coins were produced at a much swifter rate. To read a more extensive account of the manufacturing of coins, from hundreds of years BC to present day, visit the British Museum’s account of how money is made.
Fast forward a few hundred years, and the most frequent form of printed money is the bank note. With this comes the challenge of forgery and counterfeit notes. Special techniques involving watermarking and holographic laser technology are used to protect you from receiving counterfeit notes from your local cash dispenser (indeed – forged notes are often able to be detected by ATM machines in the UK). Other developments, such as the introduction of sophisticated colour designs rather than the original black and white notes, help to keep your money protected.
The estimated cost of the Bank of England producing bank notes is in excess of £40million per year, with over £1billion estimated as being produced in 2012. If you thought that was a lot – think about Zimbabwe’s inflation. The rate of money being printed in November 2008 hit such a height that inflation was estimated at 6.5 sextillion% (79,600,000,000% per month). As such, Zimbabwe abandoned its currency later that year, and thus stopped manufacturing their notes – the highest denomination of which was 100 trillion Zimbabwean dollars!