Evolution of Money: From Barter to Bitcoin

Abstract

Money is a widely accepted token giving its bearer the right to exchange for goods and services. The money supply is the total value of monetary assets available in an economy at a specific time. A central bank is an institution that manages the currency, money supply and interest rates of a state as well as oversees the commercial banking system. Economists and anthropologists may not agree about the origin of money; however, they do accept that the first form of money was commodity money. Fiat money is legal tender whose value is backed by the government that issued it or parties engaging in exchange agree on its value. Digital money is a type of currency that is available in digital form in contrast to physically structured money such as banknotes and coins. Cryptocurrency is perhaps the most advanced stage of the evolution of money since barter systems.