The first coins, invented by private citizens, appeared in the kingdom of Lydia, in western Anatolia (now Turkey), sometime around 600 BC

What is a coin? The normal definition is that a coin is a piece of valuable metal, shaped into a standardized unit, with some emblem or mark inscribed to authenticate it. The world’s first coins appear to have been created within the kingdom of Lydia, in western Anatolia (now Turkey), sometime around 600 BC.

These first Lydian coins were basically just round lumps of electrum—a gold-silver alloy that occurred naturally in the nearby Pactolus River—that had been heated, then hammered with some kind of insignia.

The very first, stamped only with a few letters, appear to have been manufactured by ordinary jewelers, but these disappeared almost instantly, replaced by coins manufactured in a newly established royal mint.

Greek cities on the Anatolian coast soon began to strike their own coins, and they came to be adopted in Greece itself; the same thing occurred in the Persian Empire after it absorbed Lydia in 547 BC.

In both India and China, we can observe the same pattern: invented by private citizens, coinage was quickly monopolized by the state.

The first Indian money, which seems to have appeared at some point in the sixth century, consisted of bars of silver trimmed down to uniform weights, then punch-marked with some kind of official symbol.

Most of the examples discovered by archaeologists contain numerous additional counter-punches, presumably added much in the way that a check or other credit instrument is endorsed before being transferred. This strongly suggests that they were being handled by people used to dealing with more abstract credit instruments.

Much early Chinese coinage also shows signs of having evolved directly from social currencies: some were in fact cast bronze in the shape of cowries, though others took the shape of diminutive knives, disks, or spades.

In every case, local governments quickly stepped in—presumably within the space of about a generation.