In Imperial China, copper coins were often the smallest unit of currency. Since it was very hard to carry and keep many of these coins in one place, the hole was to string the coins together in one length on some fiber. From there, certain amounts of stringed coins denoted higher levels of currencies (say, maybe 1000 copper coins). After some of the later tax reforms, taxes were to be paid in silver to the imperial government, but silver was not in circulation in rural and western parts of the empire as much as it was in cities and the eastern parts. So, say if you were a farmer who needed to go about paying their tax, you would string together enough copper coins to trade for silver to pay your tax. This was a big issue in the Ming empire, as the copper-silver exchange rate was severely skewed towards silver and thus, it was more expensive for those who had to trade for silver to pay their taxes.

On a nit-picky note about your question, I'd correct you and say that these coins weren't all that "ancient". They were used for the majority of China's imperial history, in much the same form. The currency of antiquity, "pre-unified" China, was cowry shells, leading to the word for the shells to be associated with the ancient word for currency as well.

Cambridge's History of China is a good general resource for this sort of thing if you want to dig a little bit deeper.

So that they could be strung together, in order to make them easier to carry around and so that you could make large purchases more easily (you could have a bundle of 100 coins, for example).

Here's an example from the British Museum.