Money Transfer History: From Barter to Bitcoin
Money transfer service was not the same hundreds of years ago. It has evolved over the years, until we got to this stage of digitalization.
Money is never meant to be static! It is only useful when exchanged between people and entities. That’s why humans thought of ways to facilitate the process of transferring money over the course of time.
So, what brought us here?
Let’s take a look at the evolution of money transfer.
Between 3000 – 600 B.C., money transfer didn’t exist in the way we understand it today. The barter system is similar to trading; in other words, exchanging one item with another. Let’s say you have plenty of apples and you want to get some oranges. Your neighbor has plenty of oranges. So, you go to your neighbor and offer him some apples in exchange for oranges.
Nations depended on barter system for centuries to exchange gold, silver, musk, ivory, etc.
Metal & Coins
The use of minted gold and silver coins were used between 600 B.C. and 16th Century AD. Gold and silver coins ruled the currency of trade between nations as it became easier and simpler.
Currency Exchange in Ancient Times
During the 4th Century, the emergence of currency exchange in its primitive form appeared. There were certain people called money changers who were responsible for exchanging money and taking a commission or a fee for doing so.
From 15th to 18th Centuries, the Italian family Medici, who was concerned about the banking matters, had opened the first international bank to exchange currencies.
First Forex Market
Starting from the 17th to the 18th century, Amsterdam established the first active Forex Market to exchange foreign currencies between agents acting on behalf of England and Holland.
Emergence of US Dollar
Under the British colonialization, the government restricted the colonists from minting currencies. To solve this issue, the colonists used any currencies they could get.
At that time the Spanish Dollar was the most significant.
Hence, the United States adopted the Dollar; and since then it has become the strongest and most used currency in the world.
In mid-19th century, Western Union was founded and changed the perception of money transfer since then. Started as a telegraph, Western Union launched the first wire transfer service.
Wire transfer is a method of transferring funds electronically from one person or entity to another, causing a revolution in the money world.
SWIFTer Money Transfers
In late 20th century, the most popular telecommunication message network was founded under the name of Society for Worldwide Interbank Financial Telecommunication (SWIFT)
The company doesn’t move physical money between banks or persons, instead, they have a worldwide network where it transmits messages between banks.
Bitcoin & Digital Currency
21th has marked the emergence of digital currencies which is one of its kind. It uses a peer-to-peer system to enable money transfers directly between two users without the supervision of a third party or an intermediary.
Transactions are verified by network nodes and recorded on a ledger, called blockchain.
Bitcoins are adopted by many people as a method of sending money fast and secure.
The world of money transfer is an infinitely changing one; and it is always in the interest of people and their comfort.
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