bitcoinBefore money, there was barter.  Who knows how far back that goes, but maybe all the way to the caveman days.  I’ll share my musk ox meat with you if you are willing to make the animal fur into clothing to keep us warm.  It was a cumbersome system because you had to find someone with the right skills to match up and convince them it was a fair trade.  Different people see value differently.

Eventually goods became a medium of exchange.  While that worked better, people still argue over value.

The first coins hail from the middle east in what’s now Turkey around 600 B.C.  The coins were made from a gold and silver mix known as electrum.  The coins were stamped with pictures.  So, a bowl made of clay might costs two snakes and an owl.

The Chinese came up with paper money that came with a warning.  None of this “In God We Trust” that’s found on U.S. currency.  In China, the message on the bills translates roughly to “Counterfeiters will be decapitated.”  Ouch.

Coins and paper money have been around for a long time now.  Currency markets were developed as a way to trade internationally and subsequently used to mess with other countries during times of war.

Western Union paved the way for money to be wired or transferred to remote places.  Credit cards and Debit cards made for even faster electronic payments, but also got people into debt when they weren’t careful.  The Federal Reserve estimates there is currently $1.02 trillion dollars of accumulated credit card debt just in the U.S.  Add in mortgage, student loans, car loans, and other loans, and we Americans owe a lot of money – $12.73 trillion dollars.

Banks added ATM machines and online banking to handle cash as well as payments electronically.  Companies like PayPal handled transactions as third-parties to help facilitate online transactions.

The adoption of smartphones may be the fastest – and widespread – adoption of consumer technology in history.  77% of U.S. adults say they now own a smartphone, according to Pew Research.  That’s more than double the number in 2011.  Despite that, the use of digital wallets has been slow.  Just 18% of consumers have used mobile payments, according to a Forrester study in 2017, and only 36% of U.S. merchants can accept it.

As for mobile payment platforms, there’s also a divergence of standards and each of them have limitations.  Apple CEO Tim Cook claims Apple Pay is the industry leader.  He said 75% of all digital payments was done using Apple Pay last year.  Apple Pay works with NFC (Near Field Communication) readers, but doesn’t work with MST (Magnetic Secure Transmission) readers.  Android Pay works with the most number of phones, but suffers from support from banks and retailers as well as not working with MST readers.  Samsung Pay is the most widely accepted.  It works with both NFC (Near Field Communication) readers and MST (Magnetic Secure Transmission), but only works with Samsung phones.

Facebook messenger lets you send money to a friend through the app.  Google Wallet, PayPal, Square Cash, and a growing number of banks will let you transfer money to others by text.

Venmo lets you pay and request money from your friends.  Operated by PayPal, Venmo is a social media and payment system rolled into one – think transferring money and sending emoji’s at the same time.

In 2009, Bitcoin started up.  It’s hard to believe virtual currency has been around for 8 years already.  It’s defined as a digital representation of value not attached to any physical or real currency.  It’s decentralized – meaning it’s not relying on a central authority or bank.  Bitcoin is the largest, but there are some 20+ cryptocurrencies with a market cap of $106 billion dollars, including Ethereum, Ripple, Nem, Dash, and LiteCoin.

Physical money, or electronic transaction backed by currency, are subject to inflation (or deflation) and the economy.  Just look at what’s happened with the Pound and Euro after the Brexit vote. Virtual currency rates can vary wildly on any given day.  Through it all, one thing has stayed constant: The exchange of one item for another.  Whether it’s barter or cryptocurrency, it’s still a payment of some form for goods or services.