There are several stories that attempt to explain how knife money was introduced but it is not certain if any or all are true.[page needed] In one of the stories a prince who was running low on money to pay his troops allowed them to use their knives as a form of currency to barter with villagers and the medium became so popular that it became generally accepted. In another story, the same prince began accepting knives as payment for small fines in the place of the current legal ring currency. Knife money may also have been brought in by sea traders from the Indian Ocean.
Knife Money is much the same shape as the actual knives in use during the Zhou period. They appear to have evolved in parallel with the Spade money in the north-east of China.
Qi knives: These large knives are attributed to the State of Qi, and are found in the Shandong area. They do not appear to have circulated much outside of this area. Although there has been considerable controversy concerning the date of their issue, archaeology shows them to be products of the Warring States period. They are known as Three Character Knives, Four Character Knives and so on, according to the number of characters in their inscriptions. Some consider the three horizontal lines and the mark below on some reverses are part of the inscription. The inscription refers to the establishment of the State of Qi. This could have been in 1122 BC, 894 BC, 685 BC, or 386 BC, depending on how one interprets the early histories. The two later dates are the most likely for the introduction of these coins. The alloy of the Three Character Knives contains around 54% copper, 38% lead, and 8% tin. The Four and Five Character Knives contain about 70% copper.
Needle tip knives: This type of knife money is distinguished by their long pointed tip. They were unknown until 1932, when a hoard was unearthed at Chengde in Hebei province; later hoards have also been found in this area. It has been suggested that such knives were produced for the trade between the Chinese and the Xiongnu (Huns) who occupied this northern area at the time. It could be that this type was merely a local variation of the Pointed Tip knives, or that it was the original type that became modified as it was inconvenient to use. Some fifty inscriptions have been recorded, which consist of numbers, cyclical characters, and other characters, many of which have not been deciphered.
Pointed tip knives: The end of the blade is curved but lacks the long pointed tip of the needle tip knives. The find spots of this type of knife money in the north-east of China associate it with the State of Yan. In recent years, hoards of up to 2,000 of these knives have been made, sometimes tied together in bundles of 25, 50, or 100. Over 160 different inscriptions have been recorded. Some inscriptions represent numbers or cyclical characters, but many have not been deciphered. Unlike the hollow handle spade money, the characters have not been generally associated with known places names. Their sizes and weights (11 to 16 grams) are very variable, leading to various sub-types being proposed by various authorities.
Ming knives: Ming knives are generally smaller than pointed tip knives, and their tips are approximately straight. This type of knife money takes its name from the character on the obverse, which has traditionally been read as ming (Chinese: 明; pinyin: míng). Other proposals have been yi (Chinese: 易; pinyin: yì), ju (Chinese: 莒; pinyin: jǔ), ming (Chinese: 盟; pinyin: méng), and zhao (Chinese: 召; pinyin: zhào). A mint for Ming knives was unearthed at Xiadu, to the south west of Peking. This was the site of Yi, capital of the State of Yan from 360 BC, so the reading of yi has found favour recently. Moulds have also been discovered in Shandong. These coins themselves have been found, often in great quantities, in the provinces of Hebei, Henan, Shandong, Shanxi, Shaanxi, Manchuria, and even as far afield as Korea and Japan. They are found together with pointed and square foot spade money.
Two different shapes of Ming knife are found. The first, presumably the earlier, is curved like the pointed tip knives. The second has a straight blade and often a pronounced angled bend in the middle. This shape is known as 磬 qing, a chime stone. Their alloy contains around 40% copper; they weigh around 16 grams.
A wide range of characters are found on the reverses of Ming knives. Some are single characters or numerals, similar to those found on the pointed tip knives. Two large groups have inscriptions that begin with the characters you (Chinese: 右; pinyin: yòu; literally: "right") or zuo(Chinese: 左; pinyin: zuǒ; literally: "left"), followed by numerals or other characters. You has the subsidiary meaning of junior or west; zuo can also mean senior or east. (The excavations at Xiadu revealed in the inner city a zuo gong left-hand palace, and a you gong right-hand palace.) The similarities between the other characters in these two groups show that they were determined by the same system. A smaller group has inscriptions beginning with wai (Chinese: 外; pinyin: wài; literally: "outside"), but the other characters do not have much in common with the you and zuo groups. A fourth group has inscriptions beginning with an unclear character, and other characters similar to those found in the you and zuo groups. By analogy with thewai, this unclear character has been read as nei (Chinese: 内; pinyin: nèi; literally: "inside") or zhong (Chinese: 中; pinyin: zhōng; literally: "centre").
State of Qi Ming knives (Boshan knives): Their general appearance is similar to the Ming knives. The ming character is large and angular. They have extensive reverse inscriptions. A hoard of these knives was unearthed in the Jiaqing period (1796–1820) in Boshan in eastern Shandong. Later finds have been made in the same area. This area was part of the state of Qi; and their legends also refer to Qi. Between 284 and 279 BC, the State of Yan occupied most of the territory of Qi, and it is generally accepted that these coins come from this time. Otherwise, their reverse inscriptions, which appear to refer to place names, have not been satisfactorily deciphered. One reading gives the first character as Ju (Chinese: 莒; pinyin: jǔ) for Ju city.
Straight knives: These are smaller knives, and their blades are not curved or only slightly curved. They were issued by a few places in the state of Zhao. This category includes some other smaller knives of various shapes. They are found in hoards with Ming knives.