The History of Coins and Cryptocurrencies

Coin currency

Coins may seem mundane, but they are the essential building blocks of our economy. They’re the medium of exchange that gets our money into stores, banks and wallets. As a result, they deserve a lot more attention than they get. The COVID-19 pandemic interrupted how coins flow through the economy, and the coins that did make it into bank vaults and retailers’ change sorters gathered dust on dressers. Nickels and dimes lingered in pockets, while quarters languished in drawers and laundromat change containers. To a certain extent, it’s the responsibility of Federal Reserve banks and commercial banks to keep these coins moving from depositories to consumers and businesses. That’s why the Federal Reserve announced a “strategic allocation of coin inventories” June 11, capping the number of coins that depository institutions can order, and encouraging them to stock up only on the amount they expect to need in the near future.

Throughout history, almost every civilization has used coins to represent value in commerce. The first true coins appear around the 6th century BCE, in the Kingdom of Lydia, in modern-day Turkey. Under three generations of Lydian kings, the money of that time moved away from lumps of electrum—a natural alloy of silver and gold—to coins with a guaranteed weight and purity, stamped with the royal seal.

From there, the invention of coins spread across the world, with many cultures developing their own unique forms. Some, like the British half crown or the German mark of 1923, were shaped to reflect cultural identity. Others, such as the Greek drachma and the Chinese jia, were based on precious metals such as gold or silver. More recently, the US penny took on a face representing a historical figure or event, while other coins have been minted with designs that are both beautiful and useful.

Even the most venerable of these ancient coins is subject to the whims of market forces and consumer demand. Cryptocurrencies, such as Bitcoin, have exploded from digital novelties to trillion-dollar technologies that could wrest control of money creation and distribution from central banks and Wall Street. To their proponents, cryptocurrencies are a democratizing force that can be used to buy a broad range of goods and services, from software to illegal drugs.

Whether you’re an investor or a collector, the key to success is preparation and research. Begin by gathering all of your loose change and sorting it into denominations to make it easier to cash in, or consider rolling up your change as you go along, so that large sums don’t build up in coin jars. Next, research local options to cash in your coins. Some banks will still accept coins, but they might have restrictions and fees. And don’t forget to look into local coin-exchange kiosks for another option.