Money, specifically the kind of money used in a certain nation, is referred to as “currency.” There are many different currencies across the world; the American dollar is the most well-known and widely used currency when talking about prices of goods, oil, natural gas, importing or exporting goods, and so on. Currencies evolved from country to country.
The UK has the pound, and many European Union countries have the euro. Japan uses the yen, while India, China, and Pakistan have the rupee and yuan, respectively. The United Nations says that there are 180 globally recognized currencies.
The distinction between a nickel and a penny is Worth 5 cents on a nickel. It is constructed of a mix of nickel and copper. It exceeds the size of a penny. It has Monticello, Jefferson’s colonial plantation, on the reverse and Thomas Jefferson on the front.
Discover the differences between them as you read this blog post till the end.
The Foreign Exchange System
Some economists say that the world would be easier to do business in if we all had the same currency. As trade between nations increased, the need for a system for exchanging one country’s currency for another grew.
The foreign exchange market, which first emerged in Amsterdam, enabled international trade to transact its currency deals officially. The foreign exchange market is called “Forex.” Today’s main forex hubs are New York, London, Tokyo, and Sydney.
In April 2021, London, the world’s largest forex market, recorded $3 trillion in average daily trading. A hard currency is one that everyone trusts. We expect a hard currency to keep its value and even go up in value when compared to a soft currency.
Hard currencies, such as the dollar, euro, pound, yen, and the Canadian dollar, usually do not suffer from frequent, sharp exchange rate fluctuations. Traders prefer to use hard currencies for international transactions.
The History Of Currency
Currency has existed for a long time. It was originally a receipt representing grain stored in the summer in ancient Mesopotamia and ancient Egypt around 3000 years ago. The name of many currencies today refers to weight, which may have been their weight gold, silver, or something else.
The word “pound” represents weight. Peso, the Spanish word for weight, is the name of some Latin American currencies. Money is defined as a medium of exchange—the impression of money since the beginning of human civilization.
Dawn Of Progression
- 9000 BC (Bartering System):
Humans began to grow crops and cattle, which gave birth to bartering, where livestock and grain were exchanged for other items deemed essential or useful at the time. Previously, we introduced the concept of currency and swapped goods or services for other goods or services under the barter system.
- 2279 BC:
The Early Babylonians well-defined the first procedures for money and established a form of measurement called the Shekel.
Cowry Shells To Metal Coins
In 1300 BC, they were used as money in areas as diverse as Africa, South Asia, Australia, and Oceania.
- 1100 BC:
Early Chinese civilization is credited for the first use of standardized currency in the shape of Small Bronze troupes of copy knives and spades.
- 687 BC:
Other civilizations started developing their unique coins. The first official currency was made out of gold and included a roaring lion’s head.
- 300 BC:
The Roman Empire established its currency, known as the denarius. These coins were mostly minted out of silver and depicted important symbolic images of the Roman Republic.
Paper Money
In 118 BC, the Chinese issued the first-ever leather bank note. It is made from rare white deerskin, and its edges were printed with bright colors.
- 700 – 1100 A.D.:
Paper notes initially appeared in the 7th century, during the tang dynasty, but their widespread use became prevalent much later.
- 1661 A.D.:
Stockholm Banco in Sweden produced the first currency in Europe. They were remediable against their stated amount of silver coins held by the bank.
Credit Cards
In 1946 A.D., the first bank card was introduced by John Biggins, a banker in Brooklyn.
- 1950 A.D.:
The Diners Club issued its first card, which is used to pay bills in more than 20 restaurants in New York without the use of cash.
- 1958 A.D.:
Bank of America issued a credit card with revolving credit. They also launched the first-ever express card, which is recognized worldwide.
- 1970 A.D:
The magnetic strip was perfected and allowed a machine to decode personal and financial information reliably.
Electronic Money
In 1990 A.D., chip technology was introduced. This chip made it possible to store a lot of information and do the verification at the points of sale.
- 1994 A.D:
With the introduction of the World Wide Web server and browser, the online shopping ecosystem was born.
- 1997 A.D.:
The European bank began to offer mobile banking with a primitive version of mobile ph.
- 1998 A.D.:
PayPal was started in California. Its members can use the internet to make payments and send money to other people.
Cryptocurrency
In 2008 A.D., an entity known as Satoshi Nakamoto posted a whitepaper entitled Bitcoin, a peer-to-peer electronic cash system. Its goal is to make global financial transactions safe, fast, and almost free, no matter how big or small.
Nickel
Nickels are coins of the United States. They are equal to five cents or pennies.
But they weren’t always worth five cents. In 1865, they were a three-cent coin. Nickels are made of nickel (a metal) and copper (a metal).
Thomas Jefferson, the third president of the United States, is on the front of the nickel. Jefferson’s house is on the back of nickel; this house is called Monticello. United State Mint makes nickels.
Why Is It Called A Nickel?
The soldiers clashing in the Civil War required different types of metals, and comparable to most coins, the half dime went out of circulation. Later in the war, a new type of five-cent piece was introduced, one made of a copper and nickel alloy rather than silver.
Eventually, the new coin became widely circulated as the nickel. To understand how it got its name, you must first understand how precious metals were administered.
In the 1850s, coins of any physical value were made of gold and silver. In an economic disaster, the collapse of a government, expensive metal coins could always be melted down.
But in 1861, the southern states began to split, and Abraham Lincoln was sworn in as President. America and its currency were in crisis. The consequence of the Civil War was undefined. The side effect of war is that people started saving hard money, specifically silver and gold.
Coins seemed to disappear overnight, and the U.S. Mint needed help to keep up with demand. The United States needed to own gold and silver so that it could make enough money to meet its needs.
Douglas Mudd, the director of the American Numismatic Association, said, “Even the penny was disappearing, and in the south, this problem was even worse.”
Penny
The penny is the United State’s one-cent coin. The person on the front (heads) of the penny is Abraham Lincoln, the 16th president. He’s stayed on the penny since 1909.
The current design on the tails is a Union Shield. It has stayed on the penny since 2010. The 13 streaks on the shield symbolize the 13 states. The top bar represents Congress and the federal government.
The bar embraces the national slogan “E Pluribus Unum” (out of many, one). The shield design represents the United States, which was reserved and organized by President Lincoln.
History Of A Penny
After the United States Mint was established in 1792, the first coin was made of a one-cent coin, but it looked very different from a current cent. The image on the original coin was of a lady with flowing hair who mounted for freedom. This coin was larger and made of uncontaminated copper, though today’s penny is copper and zinc.
In 1857, Congress stated the Mint to create the cent smaller and combine copper with nickel. The smaller cent is easier to use. The new cents presented a flying eagle on the front and a wreath on the back side of the coin.
Abraham Lincoln, in 1909, was the first person in the U.S. to circulate coins. At the same time, the Lincoln portrait has endured. On the contrary, numerous diverse designs have been used.
Difference Between Nickel And Penny
Penny and nickels are the nicknames for the US 1$ and 5$ coins. Their current designs were adopted in 2006 and 2010, respectively.
| Characteristics | A Nickel | A Penny |
| Worth | A nickel is worth 5 cents. | A penny is worth 1 cent. |
| Size | Nickel is larger and thick in size. | Penny is a little smaller and thin in size. |
| Composition | It is made with 75% of copper and 25% of nickel. | Pennies are made up of zinc coated with copper. |
| Color | Nickels are silver in color. | Pennies are bronze in color. |
Conclusion
- The nickel and penny are American currency coins.
- Both have been used since 1866 and 1792, respectively.
- Nickel is worth 5 cents, and pennies are worth 1 cent.
- The penny is also called a one-cent coin.
- Nickels are larger and tick, and pennies are smaller and thin.
- The nickel coin is made of 25% nickel; the remaining copper with silver is plated. On the other side, pennies are made of 75% copper and 25% nickel and coated with zinc and copper.