We are going through an exciting new evolution of how money is used.
Medium of Exchange (Commodities)
During the period of early human civilization, any commodity that was demanded and chosen by common consent was used as a form of currency.
Goods like furs, salt, rice, wheat, weapons, animals, and much more were used as an exchange which was known as ‘Barter Exchange.’
With the progress of human civilization, commodity exchange transitioned into metallic money. Metals like gold, silver, copper, nickel, and much more were used as they could be easily handled and their quantity can be readily ascertained.
The inconveniences of carrying metallic currency seemed too dangerous and difficult because of thefts and the weight of the money. The invention of banknotes marked a very important stage in the development of money.
Paper money is regulated and controlled by a Central Bank of the country. Today, the vast majority of money consists mainly of currency notes or paper money issued by the Central Bank.
The next type of money was the plastic payment money such as credit cards and debit cards. The aim was to remove the need for carrying cash when making transactions. With the debit card, the money comes directly from your bank account unlike the credit cards, which is a loan from the bank institution with a promise to pay back the amount used with interest each month.
Cryptocurrency is a new revolutionary type of currency. Like any other currency or unit of account, they only have value because people give it value. Cryptocurrencies were designed as a unit of exchange and as a place to store assets without relying on a Central Bank, thus cutting out the middle person with lower fees and faster transactions time.
A move towards a more direct money transaction without having other people take a cut of your hard-earned cash.