Timeline: From Barter system to Cryptocurrency
Let’s find out how money evolved from a barter system to a digital one.
Every new thing arrives on the heels of something old, making our life more accessible than before, theoretically at least. Likewise, it has been the journey of money to date. It has travelled a long way and gone through a constant evolution since its inception. Over time, the development and use of monetary systems have had a radical impact on human society and cultural development.
The Barter system
Bartering was the backbone of the economy before the invention of money. Bartering is exchanging products or services for other goods or services rather than cash or coins. Its history stretches back many centuries, at least to 6000 BC, and maybe farther. But bartering is not an exceptionally dependable or efficient means of trade.
People in China took the next step toward modern currency just over 3000 years ago. They used miniature replicas of axes, animal pelts, and other goods as mediums of exchange. Coins were coined between 700 and 500 BCE in various civilisations ranging from Greece to India to China. The first minted coins were used on the Greek island of Aegina about 700 BCE.
In the year 600 BCE China was once again at the forefront of currency evolution. The difficulties connected with moving vast amounts of coins prompted the change to paper money. Merchants adopted the practice of depositing coins with one other to make it simpler – and safer – to transport large sums of money with them. They were then given certificates for the same amount as the coins they had contributed.
England chose gold as the official standard of value in the early nineteenth century. Guidelines were created at the time that allowed for the creation of non-inflationary banknotes. Each of these banknotes was assigned a unique gold value. The Gold Standard Act of 1900 made the United States the official adopter of the gold standard. Gold became the only metal that could be used to support the paper currency due to the legislation.
Since the end of the gold standard, the worth of money has been determined by its buying power, or how much item a currency can buy, which is determined by inflation and economic performance.
With the introduction of the internet, the practise of conducting financial transactions through the internet has grown in popularity. Electronic money and cryptocurrencies have emerged as a result.