History of Money : From Barter to Rupees

        Evolution of Money :

 Hey friends, all we know is that money is so important, everyone is working to get some money for completing their daily needs, lifestyle, dreams, etc. Money is part of human civilization. But  how many of you know where  money comes from? How many of you think that our ancestors also used cash for transactions or there is any other mode of exchange. I think most of you are interested to know about how money came from. What is the history of money? Today I am telling you the history of money.

Barter System :

Barter system is an old method of exchange. Centuries before our ancestors have used this system. People exchanged their goods and services for other goods and services.

For example, If person A wants 1kg of rice with exchange of 1kg of apple from person B. Person B gives apples to person A  and takes rice from person A. Here the barter system is done.

             Barter system works on “Double Coincidence Principal”. Two coincidences have to happen. But the barter system always works.

           

 For example,  person A wants some more rice from person B he went to person B, but person B doesn't want apple now. So person A went to person C and asked C for rice but person C also doesn't want apples so person A goes to person D. In such a way person A searches for a person who trades with him. In this situation the exact barter system did not happen.

            Value of exchanging goods and services is not fully satisfied, that's why the barter system ended.

Benefits  of Barter System:

          1. Barter system makes deeper relationships between two trading partners. 

          2. Barter systems help to build professional networks and market their business.  

          3. People will achieve goals by trading with themselves.

          4. Easy and immediate exchange takes place.

Drawbacks of Barter System:

1. Wastage of time searching for a trading partner.

            2. No trusted medium of exchange.

            3. While exchanging goods and services satisfaction was not there between both parties. 

             4. Difficulty in storing value.

Coins :

In the 6th century BC, metals such as copper, silver, gold, brass, etc. were discovered. People made coins of these metals and after that  gold coins, silver coins, copper coins, etc existed. Coins are the same metal pieces with fixed weight and value which have the mark of government and also guarantee their value. Silver coin used in Maratha Era period, Mughal Period and British Period. For convenience coins are categorized into ancient coins, medieval coins, colonial coins, modern india coins. Silver coins are the earliest coins of india. During the British rule in India  coins steadily shifted from precious metal to token currency. These coins are made of brass, bronze, aluminium, stainless steel, etc. People were trading by using these coins. People used these coins to purchase goods and services.

Rupees:

Rupees come to know from sanskrit word “Roupya” means coin of silver. As a medium of exchange money has removed the major difficulty of lack of coincidence of wants in the barter system. Money bridges the gap in both space and time by widening the exchange circle .After freedom of India, Rupees are used by people as a standard medium of exchange. “Reserve Bank of India” , issued notes and coins on  behalf of the government of india. Rupees as a standard medium is trusted by people.

      Nowadays India uses digital payment options such as netbanking, debit cards, credit cards, etc. No society of india transferred from cash to cashless society.

Does the barter system exist in India now?

     Many regions in india barter system exist, people in northeastern areas such as Sikkim, Nagaland, Meghalaya, etc. In some villages people used the barter system as a medium of exchange. People without using money, exchanged goods and services.

 I hope you like this information, for any suggestions comment me. Thank you !!!