The Evolution Of Money
Money is any object or actual tangible document that is normally accepted as payment of debts and payment of goods and services by a certain person, government or socio-economic class and usually as payment for purchases. Money is usually in the form of coins, notes, banknotes, bank deposits, and various other currency substitutes. In most advanced countries, it is issued by a central government either for use as legal tender, to issue coins for circulation, or as an economic unit (a specie). The major international money flows are through the U.S. dollar, the European Euro, the Japanese Yen, the Swiss Franc, and the Australian Dollar. International trade, including commercial banking, accounts for the largest portion of the world’s economy.
Cryptocurrency is a relatively new concept and refers to any type of virtual money that can be exchanged easily over the internet and/or through online brokers. The most commonly used and popular currencies are the U.S. dollar and the British pound. Other currencies that may be used include those from nations with advanced technologies that have less developed economies. This means that if you are looking to transfer money abroad to one of the less developed nations, you will need to exchange these currencies into their respective currencies before completing your transaction.
When you send money to someone overseas, whether it be a friend, loved one, or business partner, you are passing through two different currency exchanges. One exchange handles the domestic British pound and the U.S. dollar while the other is for the foreign currency of your friend or colleague. These two exchanges do not have a common connection to the future transactions and therefore the exchange rate between these two currencies will never remain constant due to double coincidence of events. Double coincidence is when an event occurs that causes an exchange rate to pass twice across two different exchanges.
Money has been described in terms of a medium of exchange. Money as a medium of exchange is a good or service that can be used as a medium of exchange. Money can be used as a medium of exchange for any type of transactions that require a medium such as travel, payments, or purchases and sales. In this way, money acts as a universal currency that can be used in any transaction. The value of money has been defined by international law as a unit of account that has a fixed rate of exchange.
Money, like any other commodity, has a fixed exchange rate that has a direct correlation to its use-value. A nation’s currency always refers to the goods or services that it can bestow upon another nation while the exchange rate between nations expresses the cost of living of a nation and its relation to other nations. Because of the relationship between money and exchange rates, money is a valuable commodity that is required as a medium of trade.
Bartering is the process of bartering between individuals in which goods or services of differing valuations are traded between two parties. It is an approach to trade that originates in ancient times when people used things such as metals to barter for other goods. Money and barter transactions have evolved into what we know today as the process of bartering. Today, money serves as the medium of trade of choice when it comes to trading goods and services, but in the past people relied on non-monetary means such as metals and crops as the way to exchange goods.