The Journey of Money: From Barter to Blockchain - An Unveiling

Money has come a long way from its origins as a simple bartering tool to today's sophisticated digital payment methods. In this blog post, we take a closer look at the evolution of money and explore the exciting possibilities of blockchain technology.

The Journey of Money: From Barter to Blockchain - An Unveiling

Goods. Stone. Metal. Paper. Code.

Pick any term above and at some particular time in the history of mankind, it has represented store of value or Money.

Earliest records show that humans used to exchange goods and commodities to conduct transactions. The major issue here was that there were no standards.

How many hens for a goat?

Slowly, everyday goods like salt were used as a form of money, and rai stones were used to document ownership and transactions.

These systems faded out as they were a logistical headache and the goods were perishable. What next? Humans moved onto metals as they were easy to carry, are scarce, and wouldn’t deteriorate in presence or value. Gold and silver are the two most common metals used.

What started as blocks of metals turned into proper coinage as time passed. This captured people’s trust as the metals themselves were inherently rare and valuable.

These metals were a great store of value but failed as a medium of exchange. Difficulty in mining, unequal resources spread, and the risk of theft, alongside other political and economic factors, contributed to their downfall as the medium of exchange.

By now, banks and other financial institutions were established. They used metals as collateral and started minting paper notes to substitute coin money. No longer did the value of money arise from the inherent material used but was rather set by the Governments or Central Banks that issued money.

People’s convenience was considered the top priority. Banks further eased this with the cards system using debit and credit cards. Alongside, virtual modes of payment grew with e-banking facilities like NEFT, UPI, IMPS, etc.

As this system expands, no paper or metal represents our money. Today traditional financial system is simply transactions marked on ledger quoting whose account is to be debited and whose is to be credited.

Amidst all these evolutions, enters the youngest one in the financial family - cryptocurrencies.

With the goal of a truly democratic and transparent, immutable system was born the concept of blockchains and with it the cryptocurrencies.

While a very young asset class, cryptocurrencies have stirred quite a storm. The idea for cryptocurrency first emerged in 1983, in a conference paper published by David Chaum, an American cryptographer. It outlined an early form of anonymous cryptographic electronic money. Quarter of a century later on October 31, 2008 one satoshi Nakamoto published the Bitcoin whitepaper and on January 3, 2009 mined the first Bitcoin.

As of November 2022, there were 13,212 cryptocurrencies tracked according to CoinGecko with a total market cap of about $870 Billion USD.

From the crude barter system to a potential global virtual currency economy, the journey of money has been long, fascinating and unfinished!