Barter system - A world Before Crypto

Barter system

Bartering is the exchange of goods or services for other goods or services, instead of paper money or coins that were not present at the time. The history of the barter system dates back several centuries ago, to the year 6000 BC and perhaps even before that date, and it had a great influence on the way the early humans interact at that time.

Of course, there were many problems that the barter system faced which ultimately led to new methods for evaluating goods and services, most notably what is known as a "double coincidence". If you have a cow and want to exchange it for goats, you have to find someone who has goats and wants to exchange them for a cow which is It is not easy and iterative.

Among the problems that the barter system also faced is “indivisibility” if you think that your own cow is equal to 10 pairs of shoes and you find a person with only 5 pairs, then you cannot give him only half a cow and keep the other half for other trade, in addition to Basically the problem of estimating the value, because you might think your cow is equal to 10 shoes and it is equal to others only 8.

Coins

Over time, precious metals became the most important forms of propulsion. As is well known, minerals have different levels of importance as each has its own value, and each of these minerals has intrinsic value and market value, for example copper can be melted and converted into other things that can be sold later or kept, in addition to using it to pay for some Other goods or services.

In the year 600 BC, coins were introduced for the first time as precious metals were minted in a regular size at a specified value. Coins are more portable, easier to store and carry their actual value with, as well as the precious metals from which they were derived.

The Lydians, who currently inhabit Turkey, were the first to use gold and silver coins. Coins - used as a trading instrument and units of measure - ensure that the value of the goods is widely understood and accepted, and it becomes easy to compare the cost of the various items; These currencies were also marked as easy to carry and can be recycled. The introduction of coins has expanded and accelerated trade and economic growth within the Mediterranean region and beyond.

The first currencies that were used by the "Lydon"
As with the barter system, the use of coins had a set of problems. The most prominent of these problems was the manipulation of the currencies' minerals in addition to the fluctuation in the prices of the metals made of them, due to the supply and demand factor, which is normal.

By the end of the seventeenth century, national banks began to guarantee exchange rates, such as the constant setting of the value of silver for the value of gold, which paved the way for the emergence of the gold standard.