The invention of money was a major improvement in people's lives. In the past, people usually had to travel all day to find the person willing to trade their goods. Additionally, the goods that people wanted to trade did not have the standard measurement value. This led to unequal exchanges. Additionally, it is not practical to transport heavy goods from one place to another for exchange. To solve these problems, money will be the only solution. Later, people tend to expand money, from cowrie shells to credit cards, for convenience and to improve their society. At the beginning of humanity, there was no money. The only way to get what you want is to trade what you have for it. This system is called barter. Sometimes you will find someone willing to trade your belongings. However, most of the time, it is very difficult to find the person willing to talk with you. Since you're desperate to connect, you'll have to travel all day until you meet the right person. In this type of situation, it will take a lot of time to find the person who wants to exchange your goods. Economists have defined this type of problem as transaction costs. This is the time and effort people spend before they can exchange their goods. In the barter economy, transaction costs are incredibly high. Another major disadvantage of the barter system is that people cannot measure the value of goods. This usually leads to conflict as people have to make unequal exchanges. To reduce transaction costs and conflicts, people developed commodity money. Merchandise is a fundamental item used by almost everyone. In the past, tea, tobacco, salt and sugar were considered commodities. People use these products to exchange goods. T...... middle of paper...... "Host merchant services". Hosted merchant services. December 4, 2013. “Museum of the National Bank of Belgium”. Cowrie shells, a commercial currency — December 4, 2013. "Wikia." Social evolution of money. December 5, 2013. “Famiglia De Medici: The extraordinary story of the family that financed the Renaissance.” Business internal. December 6, 2013. “Origin and evolution of money”. Origin and evolution of money. December 4, 2013. .Shirur, Anand. “Evolution of Money by Anand Shirur.” Evolution of money. December 7. 2013. .