Gold and silver had been used as currency for a very long time, but as economies grew, the gold standard was adopted. Instead of using actual gold, an individual would get some kind of bill that was backed by gold in a bank, then use that for transactions. This gold standard system remained in practice for centuries until the 20th century when most countries started to do away with it.
The gold standard resented some problems, which we’ll see later, and this is why governments created fiat currency. This new form of currency depended upon people’s trust of the governments that issued the currency, rather than the actual value it carried. This new system, too, has had problems such as hyperinflation in countries like Zimbabwe and Venezuela, so it’s not perfect.