At this point, we are already aware of the concept of equal exchange, giving something that’s just as valuable as what we are given. Among the many aspects of life, this notion undoubtedly has a high degree of relevance in the economic side of things. Ever since the creation of the first civilizations, people have developed ways for transactions to be fair and just. Although the manner of doing so continues to change, the strive for equal exchange remains apparent. With that said, today, we’ll be talking about a few key moments in history that show how the world’s economy has improved over the years.
Barter System
The first records of business transactions can be found as far back as 3000 BC. During that period, coins and paper money weren’t even a thought in people’s minds yet. Despite this fact, people back then would sell and purchase goods or provide services by trading them with something of equal worth. With that said, these investments eventually became known as “barter trading.” A few examples of bartering in a modern setting include selling bottles of water in exchange for food or providing home cleaning services in exchange for medicine. Although this is quite an old method, bartering is still a reliable option for transactions today, usually apparent in small-scale deals independent of any corporate entity.
First Metal Coins
Although bartering was fairly reliable, it had one setback. If the interested buyer didn’t have any goods or services that the seller deems are of equal worth as what he is selling, then the transaction is immediately called off. Of course, like many significant accounts in history, people found a way to work around this hurdle. Existing from 1200 BC to 546 BC, Lydia was an Iron Age kingdom located in what is now known as the country Turkey. To this day, Lydia’s civilization is often given credit for being the first to utilize coins, which back then was made out of a gold-silver alloy called electrum. These coins eventually made transactions more convenient, especially for the buyer, and soon became the go-to medium for acquiring a seller’s goods and services.
First Paper Money
Soon after, the use of coins in transactions became an international standard. In the meantime, though, let’s take a look at China, the country that invented paper and printing. Dealing with coins is undoubtedly more convenient than bartering, but it, too, has its own setback. A bag of coins eventually gets heavy to carry. To deal with this inconvenience, a new means to represent one’s investment money came during the Tang Dynasty. In exchange for leaving their coins with a trusted agent, China’s citizens receive a note indicating the amount of money they have. Presenting these during transactions assures sellers that the payment they will receive is safely stored somewhere. After some time, these notes became just as valuable as the number of coins they represent, making transactions more convenient. After all, people prefer having a paper bill worth 20 coins than carrying a bag filled with the same amount of coins.
Bitcoin
Although coins, paper money, and bartering still have some degree of relevance in today’s economy, a new medium has come to the public’s attention in recent years. The internet and the digital world have become an integral part of our lives. Besides browsing for information, watching movies, listening to music, and communicating with others, the internet has also become a go-to platform for selling goods and services. Of course, if there’s an online market, there’s also an online equivalent for money. Created in 2009 by an unknown figure going by the name Satoshi Nakamoto, bitcoin is the online community’s currency. Besides using them to purchase items, bitcoins allow buyers to do so anonymously, ensuring that none of their personal information is exposed. Even so, this benefit alone can also pose quite a problem in the long run. Well, since it’s still relatively new, it’s safe to say that rules and regulations will eventually be made to make bitcoins a reliable medium for transactions.
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