Evolution of Money - Barter system

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As Humans have evolved over time, Money we transact in exchange of goods or service is also evolved.

We will see in detail why was there need to go other system.

Barter System:

Barter System was in use as early as 6000 BC introduced by Mesopotamia and it was improved by Babylonian's.


Bartering is trading services or goods with another person when there is no money involved. If you ever traded 'abc' object in return of 'xyz' object, you have bartered.


Advantages:


You dont need money to barter.


you do not have to part with material items. Instead, you can offer a service in exchange for an item


It is flexible. Anything can be traded for anything. 


Disadvantages:


The desired item only has the value in this medium of exchange. For example, you desired to have apple, you will transact only with the person who is willing to exchange apple.


Item exchanged is not quantifiable. Example: 10 apples cant be traded for a single sheep/goat.


It was long tedious process to come to an agreement before the transaction happens.


Obviously, disadvantages outweighed advantages and hence new System was introduced. As humans evolved to bronze age, Money was also evolved into coinage. Click here to read coinage


Did you know:


The Babylonians developed the earliest system of economics as we think of it today, in terms of rules on debt, legal contracts and law codes relating to business practices and private property.



So debt was present even before coinage was introduced.

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