Briefly describe the stages in the evolution of money.
Briefly describe the stages in the evolution of money.
The need to facilitate exchange of goods led to the evolution of money. The world went through a stage when money was not in use and goods were exchanged directly for one another, in a system called the barter. The inconveniences and drawbacks of barter led to the gradual use of a medium of exchange. All sorts of commodities like seashells, pearls, cow, leather, cloth, salt, wine, etc. have been used as mediums of exchange. These are called commodity money. Inadequacy of commodity money led to the evolution of metallic money, i.e. gold and silver. The lack of uniformity while using metals led to the state taking control of minting coinage. This eventually led to the process of creating paper money. Gradually, this has been evolving. There has also been bank money in the form of cheques, drafts, bills of exchange, credit cards, etc. Plastic money in the form of debit cards and credit cards are also extremely popular.
The latest stage in this chain has been that of digital money in the form of e-wallets and online banking, and cryptocurrencies.
The need to facilitate exchange of goods led to the evolution of money. The world went through a stage when money was not in use and goods were exchanged directly for one another, in a system called the barter. The inconveniences and drawbacks of barter led to the gradual use of a medium of exchange. All sorts of commodities like seashells, pearls, cow, leather, cloth, salt, wine, etc. have been used as mediums of exchange. These are called commodity money. Inadequacy of commodity money led to the evolution of metallic money, i.e. gold and silver. The lack of uniformity while using metals led to the state taking control of minting coinage. This eventually led to the process of creating paper money. Gradually, this has been evolving. There has also been bank money in the form of cheques, drafts, bills of exchange, credit cards, etc. Plastic money in the form of debit cards and credit cards are also extremely popular.
The latest stage in this chain has been that of digital money in the form of e-wallets and online banking, and cryptocurrencies.
