How Economy Changed Over Time

History Of The Economy Over Time

Introduction

There is a long…long History of the economy till now. We started with bartering and we evolved our economy to become completely digital. so in this post, we are going to learn about how bartering became digital money.

History of money

Money has come a long way from when it started. So, now let us know about how it all started…

In the olden days, there was no money so people used a trading system called bartering, but they were some issues with bartering like there has to occur a double coincidence principle i.e. both people should want what the other person is offering and it used to get confusing because communities started growing so bartering became really hard.

                    So the rulers decided to use metals like gold, copper, and other metals. People also use to used beans or salt to pay as salary and buy stuff.

Fact: Roman kings use to pay soldiers in salt as salary.

But people stopped using that because we can find salt or beans easily and there is no scarce for that. 

 

To bypass this problem people started printing coins with the king/ruler’s symbol on the coin now money was easier to carry and it could satisfy everybody’s needs without needing to occur the double coincidence principle.

After several years, China made its first paper money called the IOUs Which can be used anywhere in any shop to buy stuff.

The thought of IOUs came because people thought coins were not safe to keep in the home plus paper is easy to carry around. People who want to keep their money safe, use to go to the king’s merchant and use to give them the gold coins and give a paper worth that many gold coins with the king’s sign.

For example, if we give an IOU to a shop person which is worth 5 gold coins because it is worth 5 gold coins.

Later on, people had a problem with the IOUs. People used to ask all the gold in the vault back again at the same time, but the vault keepers used to illegally use to use the gold for theirs needs. so people stopped using IOUs.

later in the American civil war (which happened in 1861)
people had a scarcity of gold. So the government Created Paper money which we know now. in those days people use to call dollars the greenback.

 

            In 1946  The first credit card came out, called as ChargeIt invented by Jhon biggins. Later on, Visa Master Charges were new types of digital money now that there is digital money it gave an alternative to physical banks.

 

 

In 2008 a new type of economy was released, called cryptocurrency or Bitcoin it is owned by no one and it is totally digital.

Example…
the banks can see credit cards or Paytm, PhonePE or Paypal. tractions because it links to a bank account but nobody can see any bitcoin transactions because it is the wallet-to-wallet transactions. (The wallets are digital.)