Question

what was the problem that was faced early people by using grain and cattle as money​

Answer 1

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The history of money concerns the development throughout time of systems that provide the functions of money. Such systems can be understood as means of trading wealth indirectly; not directly as with barter. Money is a mechanism that facilitates this process.

Money may take a physical form as in coins and notes, or may exist as a written or electronic account. It may have intrinsic value (commodity money), be legally exchangeable for something with intrinsic value (representative money), or only have nominal value (fiat money).

Answer 2

The problem was of double coincidence.

• The system of exchange that was prevalent in ancient civilization was the Barter System. This system was used prior to the invention of money.
• Under the system, people used to exchange commodities in return for other commodities  Generally, it included people in the same region so as to be an easy exchange process.
• However, there existed the problem of double coincidence. If an individual required grain and had cattle to offer in exchange, then he can trade grain for cattle with someone who possesses both of them.
• Another problem was of storage. If a farmer had produced rice in huge quantity, then he needed a warehouse to store it, similarly if cattle were to be exchanged then the shelter had to be arranged.