The Evolution of Money

THE DIGITAL AGE
Just to stop and put this all into perspective: there were many forms of currency not even discussed above because the thousands of small societies in human history each had their own different methods for commerce. However, most of these can be classified as some form of commodity or representative money.

More recently, we have seen a completely new form of money emerge: digital money. The categories within this form of money are broad, including: credit cards, banking, online trading and internet payment systems.

· CREDIT CARDS: When a credit card is swiped, an electronic signal is sent through the card network over phone or cable lines, carrying all that transaction’s information. The benefits from this are that it makes it very easy for consumers to conduct transactions and that there is always an available line of credit.
· BANKING: In regards to banking, computers fit very well in banks, because they are ideal for storing information and performing calculations. Today, they are used in electronic fund transfers between banks, in ATMs and also in online banking, which makes it very convenient to pay your bills.
· ONLINE TRADING: Additionally, digital money has also found its place in the capital markets, since most trading is now done electronically. There are also many online brokerage websites with very low commissions that now allow you to trade stocks.
· INTERNET PAYMENT: The next context in which digital money has become so important is e-commerce. While privacy is always a concern, with internet security growing more secure year by year, online credit card transactions has grown each year over this past decade.

In fact, while the traditional credit card model has held sway for quite some time, with the rise of more advanced computing power and complex programming, the payment system can be made much more efficient and does not need to be such a burden on sellers. Thanks you influential online payment web services like PayPal, the cost of accepting credit card payments have fallen dramatically.

This concludes our version of the history of money. One thing that is clear from all of this is that money in one form or another will probably be around for a long time. Other payment systems that could become dominant in the future and have already started to take shape around the world include payment through mobile airtime, through public transit passes and Twitpay (paying through twitter).

Although we still don’t know what that dominant form of money will be in the future, one thing that’s for certain is that we will continue to spend those precious dollars in a completely different way and as the trend shows, spending will likely become easier.

ARB Team

Arbitrage Magazine

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