Money, in its various forms, has been around for millennia. From cowry shells to metal coins and even cattle, people have long been using some form of currency to acquire goods and services. It wasn't until the Chinese invented paper and printing did the use of paper money come about. The Chinese government issued paper in lieu of coins to avoid having to move large amounts of metal over long distances.

Find out more about the first paper currency and other money facts below.

First Paper Currency
The first paper currency appeared in China in the year 806. From the ninth through the 15th century, the Chinese mass-produced paper notes to the point where their value depreciated and inflation skyrocketed. By the early 15th century, the ratio between paper notes and coins exceeded 300:1. Beginning in 1455, paper money disappeared from commerce and for hundreds of years thereafter, China functioned under a silver economy. (Sources: Nova Online and DollarDaze Blog)

First Greenbacks
In 1861, the U.S. Department of Treasury issued Demand Notes to cover the expense of the Civil War. They came in $5, $10 and $20 denominations, redeemable in coin on demand. These notes were also called greenbacks because of the green ink used on their reverse sides. These notes were not backed by gold or silver, and therefore did not hold the same value as gold-backed notes. By war's end, approximately $450 million were in circulation. Each greenback dollar was then worth about 67 cents. Although the government no longer printed them after 1862, they're still valid today and redeemable in current cash at face value. (Sources: U-S-History.com and the Federal Reserve Bank of San Francisco)

First Cash Machine
John Shepherd-Barron built the first cash machine for Barclay's North London location in 1967. Instead of the cards we use today, it accepted checks that were impregnated with carbon 14 — a mildly radioactive substance. The maximum it allowed a user to withdraw was £10 ($16.50). Two years and a quarter of a century later, cash machines are commonplace, with more than 1.6 million worldwide — none of which accept radioactive checks. (Sources: BBC News and Discover Magazine)

Currency Paper Composition and Lifespan
U.S. currency paper used to be made of silk. After World War I, the fiber composition was changed to 25 percent linen and 75 percent cotton. It would take about 4,000 double-folds (folding forwards then backwards) to tear a note. With normal daily use, the average lifespan of paper currency by denomination:

$1 ... 21 months
$5 ... 16 months
$10 ... 18 months
$20 ... 24 months
$50 ... 55 months
$100 ... 89 months

U.S. Currency in Circulation
The Bureau of Engraving and Printing (BEP) produced about 38 million notes per day in 2008 and delivered 7.7 billion notes at an average cost of 6.4 cents per note. Of the notes printed yearly, 95 percent are used to replace notes already in or taken out of circulation. In 2008, there was about $829 billion in U.S. currency in circulation — the majority of which is held outside the U.S. (Sources: Bureau of Engraving and Printing and the Federal Reserve Bank of New York)

Diminished Use of Cash
Non-cash payments increased 4.6 percent annually in the U.S. between 2003 and 2006. The percentage of payments by check decreased 13.2 percent. As of 2007, card-based payments exceeded paper-based ones and nearly 15 percent of all U.S. online commerce goes through PayPal. (Sources: The 2007 Federal Reserve Payments Study and Wired Magazine)

With the increased use of non-cash payments, many people have predicted the demise of cash — including Shepherd-Barron, who made getting cash easier. Whether or not that happens is yet to be seen. However, some form of money (perhaps an electronic version?) is sure to stay.

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Resources

The History of Money
Nova Online, August 2002

China's First Experience with Paper Money
by Mike Hewitt
DollarDaze blog, July 20, 2008

The Greenback Question
U-S-History.com

American Currency Exhibit: History
Federal Reserve Bank of San Francisco

Fun Facts
Bureau of Engraving and Printing

How Currency Gets into Circulation
Federal Reserve Bank of New York, June 2008

The 2007 Federal Reserve Payments Study
Federal Reserve System, Dec. 10, 2007

Time to Cash Out: Why Paper Money Hurts the Economy
by David Wolman
Wired Magazine, May 22, 2009

The Man Who Invented the Cash Machine
by Brian Milligan
BBC News, June 25, 2007

20 Things You Didn't Know About... Money
by Jason Stahl
Discover Magazine, April 2009