The first civilizations kept storehouses for their vast reserves of agricultural products. The store-house keepers charged with the goods kept a log book of deposits. The withdrawals were also recorded as loans that were charged with interests, the prototype of modern banking system.
Coins appeared much later, about 600 BC after the old system of banking was already set-up. It was in Lydia, situated in Asia Minor its main city Sardis which is now modern Turkey, that the first coins were minted. The coin concept was around three thousand years earlier, ancient china was known to have used shells as coins.
The first minted Lydian coin was created out of a gold and silver alloy and featured an imprint of lion's head. The rest of its contemporary, like Persia, Athens and Corinth followed by making their own silver and gold coins with values the same as the real value of the material of the coin. Generally, a coin is disc-shaped piece composed of hard material mass-produced in certain standard. Its purpose is mainly for trade, not only locally but also as an accepted legal tender token for international commerce.
Paper currency was first used in China in the seventh century AD. Its value is not the same with arbitrary amount and therefore led to wide-spread inflation and bankruptcy. It again made a come-back when paper bank notes were issued in the sixteenth century for Swedish State Bank.
In America, the first paper currency was issued in British pounds in 1690. There were few attempts to put dollar bills in circulations but due to massive counterfeiting, they were devalued and the production stopped until 1800. Counterfeiting was still a huge problem that President Lincoln formed the Secret Service to track down and contain the crime in 1865.
Every country has certain guidelines for the making of their money. Coins are minted using metal alloys with each country's strict composition requirements. It is melted in furnaces and cooled down in wide molds for rolling to specified thickness. This process hardens the material, it goes to several heating and cooling procedure to soften it ready for shaping and stamping.
Paper currency goes through a different process. It requires a special kind of paper composed of cotton and linen. Red and blue fibers are included and scattered around the material to differentiate it with ordinary papers. It is in two-ply with polymer security thread sandwiched in between that is visible only on certain angle and lighting. Special ink is used to print the texts, serial numbers and images.
Some of the security features currently found in US dollar bill includes the watermark that shows an image in certain lighting position, the embedded security thread that glows under UV light, color-shifting ink, and more. Global solution for local and international commerce through-out history, and meticulous technical procedures, is how money is made.