Cryptocurrency as Money: Studying Historical Challenges of Accepted Value Exchange
Cryptocurrency Challenges Are Historical?
Blockchain technology and cryptocurrency seem to be positively changing money and how it transfers. But, interestingly enough, it doesn’t seem that the transfer process is unique, but historical and so are the challenges facing such transfers.
The Barter System
The first system was as basic as it can get. Bartering is a form of trading that allows goods to be exchanged. Though bartering still occurs, it isn’t a mass practice that runs the economy, by any means.
Cowrie shells are a replica of the first form of transferring goods. Here, people would create small portable goods that they could show off to potential buyers. The practice was most prominent in China and India. Over time, cowrie shells borne inspiration for the fiat currency that is prominent in today’s economy.
Coins are what most people are familiar with. Their use on the market started around 500 BCE in countries such as Persia. Greece, Turkey, and Macedonia. Eventually, the Roman Empire adopted them as a form of funds as well.
At some point, it seems that people got tired of using coins, which tend to be heavy and uncomfortable to lug around. As a result, paper currency was created. Originally called banknotes, this form of funds was directly connected to precious metals such as gold and silver, both of which are still regarded as valuable. Paper currency ushered in a new realm of transaction, which was modernized by checks and the telegraph. The telegraph was even the system that led to the founding of Western Union.
Eventually, countries wanted to turn banknotes into a form of currency that would be trusted and recognized internationally. Thus, countries such as England and the United States stopped using the gold value standard and established centralized monetary institutions such as the Bank of England and the Federal Reserve.
Today, much of the global monetary system is much faster and more streamlined than it used to be. People can use technology such as ATMs, bank transfers, and online monetary platforms such as PayPal for their funds. The big question is, where are we heading from here?
Cryptocurrency and blockchain technology are looking to improve the way money is transferred and of course, to decentralized the monetary system as well. Faster transfers and lower consumer costs when it comes to money may lead to the financial development that individuals are looking.