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The first coins were most likely invented by the Lydians, the inhabitants of what is today western Turkey. The Lydians had an abundance of electrum, which is a naturally occurring alloy of gold and silver. Gold and silver by themselves were already used as a means of exchange; they could simply be measured on a scale and their value assessed through the measurement. But the Lydians needed something to do with all the electrum, whose value was less certain. Their solution was to melt the electrum into circular shapes and stamp them with the sign of the king.

By the mid-sixth century BC, Lydia had approximately six mints in operation. It is probably not coincidental that ancient Lydia also became the first kingdom to have retail shops that maintained a permanent location; this was made possible by their invention of the coin.

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