The time before Money
During most of our existence, Humans did not deal with currency. Instead, we Bartered.
Bartering
Bartering is a method of Direct Trade, where, if you wanted to eat some chicken but you only had cows, you would have to find someone who had chicken and wanted cows.
This is pretty simple, the problem comes when you don't find the right person.
Gift-Giving and Debt
Another way members of societies traded was by gift-giving, with the implied social rule of future return.
It worked most of the time because societies needed to work together, but, what about when the implied contract was broken?
Solution - Money
Money is essential to our daily lives now, as it was to the people who used it before us. It has three main characteristics that make it so useful:
- Medium of exchange: It is generally accepted as payment for goods and services.
- Store of Value: It can be saved for future use.
- Unit of Account: It's used to measure the value of what we produced
And, beyond those, there are others that are, to a lesser extent, also important for a currency to work, such as Portability, Confidence and Stability.
Conclusion
Money serves as a basis on which the entire world operates. If it didn't exist, it would be invented nearly instantly.
Thanks for reading!
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How money is used to measure: