We use money on a daily basis, and while paper and metal money continue to lose popularity in the face of credit and debit cards, it remains the backbone of our economic structure. So what is money made of? Money is a confusing concept to a large portion of the population. You may be aware of how much it is worth at face value, but do you understand why?
Do you have any idea what money is made of? If you’re like the majority of people, the answer is probably no. In this article, We’ll make an attempt to remove the mystery around money and explain what it is, why it is worth, and how it is generated. Because it’s used as a medium of transaction, money has no inherent value.
Finally, we’ll look at why money is losing value so quickly and what one can do to stop it from happening so that they can attain financial independence. Sounds wonderful, doesn’t it? Let’s get started.
How Does Money Have Value?
Bartering is where the idea of money or currency originated. An individual possessed something of value, yet he or she was in need of another. Consequently, they would exchange what they have for what they desperately needed.
As a result, it was difficult for anyone to find someone who possessed what they lacked, while simultaneously need what others had. As the world’s population grew, it became more and more necessary to establish a single currency for exchanging products.
The inherent challenges and constraints of bartering were removed as a result of this. The value of paper currency was first established by countries by tying it to a precious metal such as gold or silver, which served as a reserve. When international trade grew more frequent, this was especially beneficial because a country paying in paper currency could swap it for gold at a fixed rate.
How Money Is Made
It takes highly trained people, specialized equipment, and a unique combination of classic old-world printing techniques combined with cutting-edge technology for the currency production process to be completed successfully.
The lengthy and difficult process of printing currency involves a vast number of processes in order to prevent counterfeiting.
What is Paper Money Made Out Of
Paper and Ink
Whereas the majority of paper used for items such as newspapers and books is produced mostly of wood pulp, the currency paper made exclusively for the Bureau of Engraving and Printing (BEP) is composed of 75% cotton and 25% linen — with the security thread and watermark already embedded.
Green ink is used on the backs of all U.S. paper money, while black ink is used on the faces, with color-shifting ink in the lower right corner of $10-$100 bills and metallic ink used for the freedom icons on $10, $20, and $50 bills, respectively. Color-shifting ink is used to create the “bell in the inkwell” freedom icon that appears on $100 bills.
The addition of minute background colors to $20 bills is intended to strengthen the bill’s security against counterfeiting. Using photoengravers, the BEP’s Simultan presses, which have a capacity of 10,000 sheets per hour and can print at high rates, transfer the design to offset printing plates, which are subsequently printed on offset printing plates.
The sheets are then placed in WIP (Work-in-Progress) cages for a total of 72 hours to dry.
A technique known as intaglio printing is employed to create the individual portraits, vignettes, scrollwork, numerals, and text that distinguishes each denomination. Its origins in the Italian word “intaglio” refers to cutting or engraving steel dies with sharp tools and acids in order to “carve” designs into the steel.
Engravers can specialize in a variety of subjects, such as portraits and vignettes, while some are professionals in lettering and script. By using the method of siderography, the pictures are merged and transferred to a printing plate for use in printing.
The press mounts the engraved plates and inks them. After wiping away extra ink, only the image is left. When the paper is pressed against the plate, ink from the plate’s recessed areas is pulled onto the paper, creating the picture. On the backside of US banknotes, the green engraving is printed using intaglio presses that run at high speeds with sheet feeds.
Back-printed sheets must be allowed to dry and cure for 72 hours before being transferred to the face intaglio press, where unique cut-out ink rollers are used to transfer different colors to specific areas of the engraved patterns.
To ensure the greatest level of quality, the printed sheets are inspected using cutting-edge technology. They must be clear of any minor flaws, such as ink streaks or spots, before being used. Sheets that are not flawless are rejected and ordered for incineration. The 32-subject sheets are divided into two 16-subject sheets.
Final printing stage uses Currency Overprinting Processing Equipment (COPE) printers to add notes and coins with identification numbers and serial numbers as well as a Federal Reserve seal and a Treasury Department seal.
How Does the U.S. Mint Make Coinage?
While the Bureau of Engraving and Printing (BEP) produces paper currency, the U.S. Mint handles all coin manufacture. It makes the penny, nickel, dime, quarter, and other coins, including the $1 coin. First, the US Mint used copper, silver, and gold.
As these metals’ prices rose, they began mixing in other metals. Due to the lack of copper in 1943, zinc pennies were issued. Zinc dominates today’s pennies, with barely 2.5% copper. Over time, silver coins lost silver content, becoming largely copper and nickel.
No ordinary coin now has silver. Until the Great Depression, the government also used gold in the form of coinage. At that point, the mint discontinued the practice of utilizing gold in order to steady the price of the precious metal and did not resume it in the future.
Coinage was first powered by horses, then steam, and finally electricity. While the US Mint still makes coins the same way they did 200 years ago, it now uses computer technology. Computers can produce 720 coins every minute using dies and presses. The US Mint can produce 46,800 coins every minute with 65 presses.
In conclusion, money is merely a unit of measurement that may be exchanged. Apart from what other citizens are willing to exchange it for, it has no intrinsic value at all. In other words, it isn’t backed by gold or anything else of value. The government issued an executive order to create it.
Aside from that, the value of money isn’t set in stone. Every day, the value of the currency decreases. It’s not difficult for you to do your job. Collecting money and then multiplying it at a pace faster than inflation is what this is all about. This is the path to financial independence.