Currency.

• Position: LIFE-CYCLE STUDIES

Overview

Trade is an ancient practice that depended for a very long time on barter. But sometime between 9000 and 6000 BCE, the pluses of a medium of exchange emerged, and cattle became the first form of currency. Better, but still awkward ("Say, do you have change for a Holstein?"). The quest for even greater convenience continued, and between 640 and 630 BCE the Lydians, a people native to Asia Minor, literally coined the first modern form of money by fashioning embossed metal disks from electrum, an alloy of gold and silver.

Paper money (as a circulating medium of exchange) was invented in China between 806 and 812 CE. Unlike precious-metal coins, which have intrinsic value, this important conceptual innovation involved a relatively worthless piece of paper that represented a "promise to pay" backed by stores of valuable metals or other commodities, and led eventually to the invention of modern banking in medieval Italy. Worldwide, 172 different currencies are now in circulation, from the afghani to the zroty. One of the most recent is the euro, introduced in 2002 and used by 300 million people in 12 European Union countries.

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Disposal

Paper and polymer currency also differ when it comes to recycling. Once U.S. dollars have been damaged enough to be taken out of circulation, they are usually shredded at Federal Reserve Banks and pressed into briquettes for landfilling. Some banks find other uses for the over 7,700 tons of currency taken out of circulation every year; some sell the notes to private businesses, such as companies that produce stationery from the shreds.

Worn-out polymer currency is also shredded, but it is then melted down and formed into pellets for recycling. The polymer pellets can be refashioned into a variety of products, from compost bins and plumbing supplies to wheelbarrows and roof shingles. Since polymer notes last roughly four times as long as paper...