The Evolution of Transferring Funds
Decades before, common people used to deal with things in exchange for something. We call it the Barter system in which the exchange of goods takes place in favour of both parties. However, this is only possible when both of the parties are together with their interchangeable products.
Money, on the other hand, was a powerful yet valuable asset even at those times. Various forms of money were invented to make it more dynamic and handy.
Money is always meant to be rotated among the people. The ones who have money will purchase something valuable, and in return, they pay in the form of some tokens or paper notes. Also, this transaction could only take place when you’re together.
This exchange had been going on for the last 3000 years. So obviously, it isn’t a new concept for anyone. Money works when it’s transferred to someone in exchange for something which benefits either person. Money had taken lots of forms like coins, tokens, paper notes, cards, and the trending international fund transfer exchange is Cryptocurrency.
These all have some advantages and disadvantages in some way or the other. This evolution goes on due to circumstances and the needs of people. Different countries have their own set of currency and values. In simple words, a Rupee that has value in India won’t work in America in the same way because their valuable asset is Dollar. That means the worth of a Rupee must be converted into a Dollar to make it valuable.
Yes, this could be a drawback of static country currency, but Cryptocurrency is something way better than your normal currency in terms of international exchange.
So what’s a cryptocurrency, and how did the evolution has been taking place? We’ll cover every corner along with all the methods of fund transferring options one by one.
The Barter System
This exchange is believed to occur for the first time from 3000 B.C. (BEFORE CHRIST) to 6000 B.C.
This system took place between Mesopotamia and the Harappa Civilization of the Indus Valley.
The Barter system involved the exchange of precious stones like Gold, Silver, Bronze and the exchange of other valuable items like Spices, Wine, Tea, Mint, Salt, Wool, and Silk.
This Barter system can only be appreciated when either party satisfies the needs of each other. Else this system will fail.
Metal and Metal Coins
Between 6000 B.C. and 16th century (A.D.), coins made of Gold, Alloys, and Silver were the national currency of Lydia (now Turkey’s part). As trade started to expand like wildfire, the value of Gold and Silver stared rising exponentially, and these methods became more valuable in exchanging to buy products.
Overseas Banking System
In around the 15th – 18th century, an Italian family opened several banks in overseas lands, which they named Medici. They were operated for the ease of textile merchants at those times. They created a booklet having 2 columns revealing the sum of currencies, either local or foreign ones.
Amsterdam Forex Market
This took place between the 17-18th century. Amsterdam started to maintain a Forex Market in which currencies were exchanged between people for the benefit of England.
This era (18th century) is also called “Birth of US Dollar”, which was introduced during the American Revolution in the late 18th century. The Dollar was accepted as the National currency by the United States of America in 1792. At that time, no one knew that this currency would be the most recognized in the world.
Western Union Telegraph Company was made after renaming the same company, which was then called New York and Mississippi Valley Printing Telegraph Company in 1851.
The firm’s special thing was that this company introduced fund transferring through cables from one person to another on his telegraph network. Since it’s cable transfer, the money was called electronic funds.
By the end of the 20th century, PayPal emerged as the Global Company of fund transfer and the first online form to transfer money across the globe.
As of now, PayPal’s annual payment volume in 2020 amounted to US$ 936 billion and the profits in the same year were around US$ 4.2 billion.
These exchanges were fine till Cryptocurrency and Blockchain Technology was introduced in 21 century. These revolutionized the world by introducing Digital currency as the mode of transferring funds.
The Arrival of Cryptocurrencies
Digital currencies like Bitcoins, Ethereum, Ripple, and many more valuable assets arrived in the market when the problem of international fund transfer arose.
These Digital currencies work between two or more people in which there’s no role of intermediates. If we talk about Bitcoins specifically, it has the biggest market cap, which holds around 68% of the total market and has a net worth of US$ 59,571 which is an astounding figure.
Bitcoins and other Digital assets work through online mode. This isn’t a real physical entity that you can touch or hold. It’s a form that is virtual yet has great value. This is in the form of coins that could be sent to someone who requires those coins, and in return, he gets specific services and products.
Why Is Cryptocurrency Better Than the Rest?
- It solves the primary objective of fund transfer across the continents. This model is way easier than the rest of the models because of its transportation nature. Since it’s all online, an International fund transfer could take place in seconds, which was impossible some decades ago.
- This has a great value and eliminates all the beneficiaries and their charges as well, which makes it faster, with no overdraft charges, and with minimal fees and sometimes no fees.
- It doesn’t require a huge setup to make transactions. All you need is a mobile and an Internet connection. This mode is really easy and convenient. You don’t need to visit the bank and stand in long queues.
- Duplicacy is not possible in this case. It’s designed in such a way that this Digital currency cannot be replicated. This is something surprising and astonishing too.
- Every transaction is recorded, which happens between the peers. This is supported by a Technology called Blockchain Technology, in which every transaction is linked by a chain called nodes. The special feature of Blockchain is that this transaction that happened is immutable and irrevocable. You cannot make changes or delete the transactions. This cross-border exchange is indeed one of the finest modes of transferring funds anywhere to anyone.
It’s rightly said, “Necessity is the mother of Invention”. Hence these all modes prove this quote. With the evolution of humankind, these modes were invented to sustain and move forward with time. Yes, as evolution will go on, new methods of transferring funds will be created. It’s like a rail track that goes parallel with evolution.