Finance in the 21st century
Finance has reflected the evolution of society for millennia. What started off as a simple bartering system, where one could exchange some milk for some eggs, evolved into commodity money with coins made from precious metals, to banknotes backed by gold bullion, to the fiat currency we have today.
That twenty pound note you used to buy dinner last night has no intrinsic value in and of itself, but instead has value defined by government regulation to be worth the same as a large Dominos pizza.
Paying with plastic
Whilst it’s always reassuring to have some banknotes in your wallet, more and more of us choose to use “plastic” to pay for goods and services. It’s a hassle to count out the notes and coins needed for a bill, but with modern technology we can insert our debit or credit card into a card reader, type in our PIN number and it will take the exact amount we need to pay for our shopping basket in an instant.
Visa and Mastercard have made paying for things around the world a hassle-free experience, and in many European countries it is now commonplace for people to pay with just a tap using some clever contactless RFID technology for bills under £30. Paying for goods in a shop has never been quicker or easier, and this has a dramatic impact on sales numbers at places with high foot traffic, such as railway stations, where people can’t wait in line.
The age of the Internet
By the time the internet became mainstream, everyone was already happy purchasing things by card, and so card payment quickly developed into the main option for online payments, whether you are looking to buy a book from Amazon, pay for a Spotify subscription, top up your balance at your favourite casino sites, or even pay your electricity bill.
Most people use their card to pay for everything online, but PayPal has managed to carve out a good niche for itself as an online-focused payment system over the last 20 years by becoming the payment platform of choice for eBay sales. PayPal was also one of the first companies to make it easy to send and receive multiple currencies into the same account, but recently platforms and apps like Transferwise have taken that crown by significantly reducing the fees involved.
Bitcoin and its use as the currency of the dark web at places like the Silk Road may have made the Blockchain famous, but the technology has a variety of much more above-board use cases.
Most importantly, the Blockchin is a public ledger, which means that all transactions can be verified without the need of a centralised financial service like a bank or card payment service like Visa or Mastercard. Financial services charge a fee on every transaction, which is often 2-3% on consumer purchases – the Blockchain can bring these fees down to near-zero and that is revolutionary!
Moreover, Blockchain-based currencies have no nationality, so it does not matter if you are an Australian national based in Poland and want to buy something from a business in South Africa like www.casinoza.com – the currency is truly international. And as the world continues to become ever more globalised, a single global currency that works across all borders is no bad thing.
Money, it seems, has come a long way.
Image by Kaufdex