As the world as well as several things in it continues to progress and move forward , there are several changes that also occurs of which our currencies are a part of . Our currency is a major factor or item that has changed over the centuries as well as many other growths that occur as in the technological affairs, social as well the physical but today let's focus on the "evolvement" of currencies.
As humans, we can't be able to provide all of our needs by our ownself ; the services as well as goods we need and consume can't be provided by our own selves no matter what it is that we need for life.
One person can't be a farmer on his own where he or she will cultivate all that he will need and as well become a fisherman for his fish , a manufacturer of his clothes and other needed items, a worker of his own company and other works that are distributed around the globe hence the need for Exchange of goods and services.
No one can be able to do such things where he can provide everything for him or herself but one can get all these when he gets to exchange goods and services; where he uses his skills to also gain favour from someone with different skills. There they trade their skills and goods for the other .
History On How Exchange Of Goods And Services Have Evolved!!It was of clear view that, a person can't have all that he or she wants as they can't also consume all that they produce on their own, it was therefore necessary to come up with a system on how to exchange goods and services of which the first was the Barter Trade System .
This system didn't work well based on how it was and it had fairly many cons hence a new system was initiated where certain substances were recognized as a "token or substance"of exchange.
This was also good as it could solve the problems the first system couldn't. It also had a few consthough.It was used for sometimes , then the paper currency was initiated.
Per my source,China was the first country to use recognized coins as a medium of exchange.
For now , such paper currency is currently everywhere as a medium of exchange but other means were also initiated which is the digital medium of exchange;the credit cards, debit cards and cryptocurrency.
Let's take a look at each "evolvement" one after the other.
THE BARTER TRADE SYSTEM..The Barter trade system was the first system to be used for the exchange goods and services . In this system, members or people who engage in the exchange makes a mutual agreement where one brings an item for the other. They are supposed to meet, look at each other's good and in return trade or exchange. It was a difficult task and if you still don't get it read the scenario below.
Assuming , I have a bowl of rice and I need a bowl of beans , I would look for someone who also has a bowl of beans and is willing to trade it for my bowl of rice.
Sounds crazy right?That was the difficulty they were going through.
The system was helpful though but was a really difficult and unfair method. It having an advantage that,it helps in the exchange of goods and services, it also has a lot of cons or disadvantages of which some includes;
Lack of common measure of goods : Goods were sometimes not fairly traded , one could bring a "valuable" food item for a less "valuable" one and there was nothing to different it's worth so they couldn't swap or trade according to measurement.
Difficulty in getting a double coincidence of wants (Possession and want) : In as much as it was helpful, there was a lot of trouble finding what you actually want. You might get someone with the items you want but may not be willing to take what you offer or you might get someone who is willing to take what you offer but doesn't possess what you want.
Here, it brought a different sense of difficulty as there were few chances of coming across such double instances were a person had exactly
Indivisibility of certain goods : With some goods it was so difficult to trade them as there was no way you can divide them. For animals , it was way impossible to divide them and no one will be willing to swap a cow for a goat so making a real deal of difficulty in swapping such goods.
Difficulty in storing value before getting someone to trade with : Even with the difficulty in trading items , storage was also a major problem and that was really a new set of frustration and problem. When the items are not exchanged as soon as possible , some starts to go bad causing a real deal of loss and it was as a result of such that some people used as an advantage to cheat other people since some were in a rush to trade them with any conditions the other brings.
Decreased or Low personal business as compared to now: At such times , there was little or no way someone could offer a solution by saying, if you want to swap come to me and swap simply because they can't offer all that the people will need even today no one can hence just a few items could be used for a personal business.
Based on these disadvantages and many others , a whole new system was initited and it was the use of recognized substances for exchange.
THE USE OF CERTAIN SUBSTANCES FOR TRADING.As and when people got to know the real disadvantages of the Barter Trade system of exchange ,a new way or mean was then used to exchange where you can use certain recognized substances to buy things from someone who doesn't want your goods in return and vice versa so here it was really beneficial. These noticeable or recognized substances that were used in trading included; shells, salt, animal and several other things.
If I have some mangos but need oranges then I would have to search for someone who needs my mangos, sell it to them and get the substances for exchange and then with that substance, I can buy the oranges I want to buy.
PRO: This was an effective method and was fairly great as not only was it able to serve as a medium of exchange, but also solve the problem of "cheating" during exchanges as it added value to the things people own, it increased personal businesses as people can now use the money to get more stuff and again get people to buy from them with the "recognized substances " .
CON : With these substances, it sometimes looked too heavy to carry , let's take a look at some of those substances in the picture below .
3 pictures downloaded from wikipedia.org with their download link at the bottom (reference section) of article.
Taking a look at these pictures , it can be assumed how heavy it might be but that doesn't mean it wasn't good. Few years later the paper currency was initiated(the bank notes)
THE BANK NOTES (Paper Currency)..An example of the first currency of China.. link in reference section..
As the name suggests, this is the paper kind of currencies that we use nowadays, it is made or produced at the recognized banks and basically a lot countries have their own currency.
Ghanaian currency. Downloaded from google..
Paper currency was and is quite handy as it is easier to carry around and also it solves all the problems that were associated with exchange of goods and services but there is a but. As a paper like material it has so many things that sometimes causes it to be rejected by other people as it becomes depreciated based on somethings people do . These things sometimes make the currency tear, become faded, tarnish it's color and sometimes erase it out from existence of which some of these activities included;
Writing on the notes
Holding them with dirty hands; oily hands, dirt and other things.
Holding them with wet hands
Some putting them in their brassieres
Crumpling them and folding them into different shapes and as well as other ways that wasn't supposed to be.
Burning currencies
These were no great and sometimes causes spread of diseases as people put them in their mouths, brassieres and several other places.Others also lose them to thieves who break into their homes and Rob them of it.
For those who had a sense of saving , they kept their money in the bank and this is where we continue from..
THE BANKING SYSTEM AND IT'S LIMITATIONS.The banking system on its own was a really great source or place for saving money. Putting your money in the bank was a great thing since not only does it prevent you from spending on impulse, it also prevents the occurrence of theft and as well improper handling of money.
Although, the banking system proved itself to be great, it still had some limitations that the people suffered which is still going on . Some of these limitations includes;
Transaction limits : Even as we were or are the owners of our own money, the bank systen has a specific limit that we can send and receive within a specific period of time. This isn't a great deal , what if I leave it at home and people come to rob me of it, I spend on impulse or whatevermught happen for me to lose it? That means the purpose of the bank was not complete Therefore such a limitation was and is not really great.
Not always available : I don't know for certain countries but with my country, the banking sectors are not always available that is, they don't open 24/7/365( 24 hours in a day, 7 days in a week and 365 days in a year or 52 weeks in a year). They only open within a specific period of time which again limits us from having our resources anytime we want to.
Bank Problems /Server Down : Sometimes there is unusual that can happen where the banking system has failures in it's operation hence needs to close it's operation. Sometimes the server goes down for sometime and as such limits us from getting out funds.
Difficulty In Transacting To Other Countries : We do find a great deal of difficulty when we are transcating our currency (money) to someone at a different location in the globe. Some transactions take weeks and sometimes even more for us to able to pass it through and the transaction fees involved is even mind blowing.
Account Can Be Hacked : Aside all these disadvantages mentioned , your account could also be hacked and funds stolen . It was really possible for a hacker to have access to your account and transfer all that he can causing you to lose big time.
These and many more were the flaws in the banking system but even with that people tend to be comfortable with it.
Sometimes these problems could cause a hectic day for a person when he or she finds out his balance is gone due to a hacker attack or gets to find out the server is down while he needs the money for an urgent situation , not talking of not being able to get the funds across to another part of the globe in time. These problems were quite huge and disappointing but can i tell you that problem has being solved or almost solved?
THE INTRODUCTION AND USE OF CRYPTOCURRENCIES..Currently in this century(21st Century), a programmer or a group of programmers since it stays unknown wrote a "program"(lines of codes) or passed around a white paper titled,"Bitcoin: A Peer-to-Peer" Electronic Cash system in the cryptography mailing list which had the sole aim of enhancing the transaction of cash from one person to the other with ease and it solves all the problems the bank system couldn't solve as
it is decentralized ; is not controlled by anyone
It can be transferred from one individual to the other no matter the distance within few minutes or even seconds.
It has no server down or problems on its own.
It is always available and can be sent at any time and anywhere .
Again, it doesn't have any limitations to whom transfers the money or how the transactions take place as to the amount sent or received.
It is again nearly impossible to hack and one can only lose his or her money based on his carelessness and exposition of his or her key phrase.
Image from businessinsider.com (image explaining what a cryptocurrency is)
Let's take a brief look at what a cryptocurrency is and how it is used ; from it's registration to transaction of funds and as well some mistakes that can cause a person to lose his or her money, and the misconception people have about cryptocurrencies..
WHAT IS A CRYPTOCURRENCY?? This question has been the talk if the town recently as I started to look at it and learn about what a cryptocurrency actually is. Some people have various views about it as to how to define it to people or explain it to people when asked but for me, the only answer I give them is just copied from a site I read about cryptocurrencies on and it goes;
"A cryptocurrency is a digital currency in which encryption technologies are used to register it's generation of units of currency and verify transactions. " There are several example of cryptocurrencies if which a few are Bitcoin, Bitcoin Cash, Ether, Litecoin and Dogecoin.
It being decentralized also makes it a suitable option for the transaction funds from one person to the other since no one controls it and can decide to wipe it out from existence. It having an encryption technology simply suggests that , it has a system called the blockchain whichregisters or takes record of all transactions that has taken place or takes place since it continues to take the record. It then links the records to each other based on how a transaction took place and the people involved. It records each transaction in a block and then links it to the previous transaction that took place. This will be explained deeply in my next article on this titled "THE BLOCKCHAIN" for you to understand this.
HOW TO GET STARTED WITH CRYPTOCURRENCY..I know one might be asking, how do I get started with this if I want to start using cryptocurrencies? It is really simple.
As with banking system , to start using it you will have to find a suitable bank where you intend on doing your transactions, create an account(bank account) , use a signature or thumb print as your guarantee to transfer your funds and account number to send money to someone so is this in cryptocurrencies.
To get registered or use cryptocurrencies ,
the first thing to do is to find a Bitcoin wallet app of your choice. The wallet app serves as the bank for your money. They are really many wallets of which some includes; Guarda wallet, trust wallet, bitcoin.com, blockchain, coinbase, binance and a whole lot.
Right after choosing your wallet app, the need to register. In the process of registering, you are presented with a "key phrase" , a "seed phrase" or whatever a wallet calls it and that is your private key.
The private key mainly comprises of a 12 or 24 word that is the guarantee to your account , in order words your login.
Whoever lays hands on it becomes the owner of your money as they can use it to log into your account and that will be based on your carelessness.
It is therefore advisable not to share your private key with anyone
When the registration is done then you are good to go with your seed phrase successfully written ..
HOW TRANSACTIONS TAKE PLACE IN CRYPTOCURRENCY..As we all know , with the banking system,when one wants to make a transaction, you use the Account Number of the recipient to do so and in Cryptocurrency , you use the public address.
The public address serves as the Account number to which the funds are sent to an individual. For any Bitcoin Wallet you have the public key to a specific cryptocurrency you want to receive.
An example of a public key include;
bitcoincash:qqmuvyllk79wlxlam5y4fms7z5cfmknvus2y3m8x20
HOW TO RECEIVE CRYPTOCURRENCY ..Basically , transactions in cryptocurrency is mainly based on sending and receiving and to do so, the public address is used. For a transaction to go on , the receiver has to send his or her public address to the sender who in turns send the money or cryptocurrency to that address.
For example if you are receiving Bitcoin Cash from someone,
you open your wallet
Locate Bitcoin Cash (BCH) or the cryptocurrency involved
Simply tap on it for a new page to appear where you tap on receive and copy the public key.
Note : You can also use the QR-Code where the sender just scans it to send you the amount
An example on how to copy your public address (on coinbase) can be found in the video below.
.SENDING CRYPTOCURRENCIES.
Right after the public key is sent to a person, he or she also makes the transaction simy by also following similar steps.
For example if you are sending Bitcoin Cash to someone,
you open your wallet
Locate Bitcoin Cash (BCH) or the cryptocurrency involved in the transaction.
Make sure you have more than the balance you are transacting since you are supposed to pay fees for every transaction you make.
Simply tap on the name of the cryptocurrency involved for a new page to appear where you tap on send.
Fill in the information, the address and amount to send and confirm .
Note : You can also scan the QR-Code in case a user or receiver is nearby..
On this note, we are left with just some precautions to prevent your cryptocurrency from being stolen.
Some ways of preventing yourself from getting your cryptocurrency stolen or missing are;
Don't share your private phrase.
Check the domain of the site you are going to use carefully when it is really necessary to use your wallet or send your money to it.
Avoid free apps that promises huge profits in return.
Use "hardware" Bitcoin wallets
Always make sure your anti-virus apps are up to date and modern.
You can also watch the video below to learn how to secure your funds.
Thank you all for your time reading this. I hope @Telesfor @Koush @georgedonnelly@MarcDeMesel @molecular@micropresident @TomZ@JonathanSilverblood@unitedstatian and many more read this and drop their reviews.
It's Dangeous_Fly once again, Bring It On!!!.
Resources / References.
Wikipedia.org
Businessinsider.com
YouTube.com
Google.com
interesting article. it was a good read. thanks