Evolution of methods of payments
● Barter system People used to exchange one type of Goods and Services with another type of Goods and Services. Problems: 1. No common measure of value was there. It was difficult to decide that how many Apples would be enough for buying 1cow. 2. Seller and buyer needed to coordinate with their respective Goods and Services. For example, if one needs a cow and has surplus apples, they need someone in need of apples and cows in excess. 3. Transportation could be difficult. One may not be able to carry the good everywhere. ● Commodity money: A valuable commodity is used physically to exchange goods. The commodity holds its value even after it's melted down. For example, People started minting coins made of various metals like Copper, Silver and Gold. Problems: 1. Metals can be heavy to transport. 2. Carrying Gold coins can be unsafe for your well-being. Anyone could rob or even murder you for this expensive metal. 3. Uncertainty about purity of the metal. ● Commodity backed money: C...