Money Explained:
Money is any instrument of exchange used to facilitate trade, store of value, serves as an instrument of deferred payment and also a unit of account.
Money is a measure of value, it can be in many forms, like;
- physical form (Coins and bank notes)
- Digital form ( electronic bank balances or cryptocurrencies.
Money is a legal tender. (It is generally acceptable)
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The Evolution of Money.
Money has evolved from one stage to another until we got to this age of digital currency. Let me quickly take you through the stages of money, kindly walk with me.
1. Barter System:
In ancient times, there wasn't anything like money. What was exsted then was "the barter system"
Trade by barter is simply a way people exchange goods and services as a means of settlement. For example, a fisherman giving a farmer fish in exchange for some vegetables. This method of exchange was not the best methos even as it is tricky.
For the bater exchange to take place, there must be "mutualneed ", (this means that you must need what I need). This mutual need aspect is the greatest downside of the battering system because it's usually difficult to find someone that needs what you have at the same time, you need what he has.
2. Community Money:
This is a stage where people use valuable items as money. Here, people started using items everyone considered special and valuable as a means of exchange. Some of these items may include: salt, gold, cowrie shells, etc.. At that time, these items served as money, and people trusted them even as they were easy to carry about.
3. Metal Coins:
This was the first official money that ever existed. They were formed from gold, copper, and silver. These coins had a set value, depending on the actual stone used to fabricate it. The only disadvantage is that it was difficult to carry lots of it from one place to the other
4. Paper Money:
Because of the downside of metal money, people created paper money.
It was more convenient to move from one place to another.
5. Bank Accounts and Checks (money you can't actually see):
At this stage, value can be transferred from one person to another by mare writing an instruction on paper or on a check.
6. Digital Money:
This is the stage of online payments and cards.
At this is stage, people who own monies in their bank accounts can pay you without either of you touching the money physically or signingany paperwork. You only need to provide a valid account number, and the value is transferred to you throughtheir mobile devices.
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7. Cryptocurrency:
This is perceived as the future of money. This is a type of money that is designed to operate on computer networks without depending on any third party. This means that it is not controlled by the government as it is the case in conventional banking.
Conclusion:
One may ask; why have money constantly changed over these past years?
This is because people have continued to evolve over time and as such they also want faster, safer and even more convenient ways of trading with one another.
As you have seen, each and every move in this evolution process is an improvement and it made life and trading easier.
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