Barter Exchange - We all know that the old system was exchange of goods or services for other goods and services without a medium of exchange such as money.
During ancient times, man was not aware of paper notes, debit or credit cards - needs were fulfilled by exchanging their own goods and services for different goods and services of his need - for example a carpenter builds a fence for a farmer - the farmer in turn paid back the carpenter with a specific amount of crops or other foodstuff in compensation for building a fence irrespective of its actual value.
Then came another Medium Of Exchange in the form of Stones and Shells - The use of shells and stones began as a direct commodity exchange - this was considered better as the Second Generation of trading - shells and stones were found in almost every continent namely America, Asia, Australia and Africa.
The Third Generation of Exchange was precious Metals and Gemstones - It is a rare metal elements (or their alloys) that are still used as means of payment as well as used for the production of coins, jewelry, etc. However, metals like gold, silver, etc. were the medium of exchange in the third generation of trade.
Later the authorities introduced Paper Money - we all know the use of paper money as a medium of exchange that exists even today - this was or in fact is considered to be the Fourth Generation.
Paper money refers to the exchange of goods and services within an economy. It is a printed paper and is freely accepted in the settlement of claims.
Paper Money has the credibility of assuring a great margin of security and durability - this has greatly changed the aspect of trade.
Plastic Money is the Fifth Generation of Money - Debit Cards and Credit cards are typical forms of plastic money - the acceptance for settlement is widely accepted worldwide as the issuers guarantee payment.
Finally, the Sixth Generation of Money is Digital Money - This is in a Digital or an Electronic form. It is distinct from paper money and coins - it exhibits the properties similar to physical currencies as it allows for instantaneous transactions and border to border transfer of ownership.
Digital Currencies are the payment methods for the future - the currencies are changing business, money and the world by making it convenient and useful for most of us.
While the Authorities find ways of accepting Digital Currency, let us know the different types of Digital Tokens and how they work:
1)Bitcoin - is a digital currency created by the mysterious Satoshi Nakamoto - it can be used to buy items locally and electronically - Bitcoin can be used for all types of real transactions.
2)Ethereum - is a decentralized computing platform that features smart contract functionality - with Ethereum peer to peer contracts can be safely done in business because all terms are spelled out in a smart contract entrenched in blockchain.
3)Ripple - is a real-time currency exchange, remittance network and settlement system. It offers instant, certain low-cost international payments. The native currency is referred to as XRP.
We have come a long way in understanding the medium of exchange for trade - while there have been different modes of payments earlier, then is there any reason why the Medium Of Exchange for trade in Digital Currency should not be legit?
See you soon!
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