What is Barter?
Can you imagine a world where your worth isn’t solely determined by the amount of money you have? A world where your skills, talents and time hold value in themselves. A world where not having enough cash wouldn’t stop you getting the things you need. The world you’re imagining - is the world of barter.
Bartering is a system of trade. And it’s not just any system, it’s the oldest recorded system of exchange, dating back to around 6000 BC. It’s so primitive we can’t even be sure of its origin, but it’s said to have been introduced to the Phoenicians by Mesopotamian tribes. What we can be sure of, is that the history of barter runs deep across the world.
The basic concept was as simple as people exchanging goods and services. Let’s say for example, you were a dairy farmer. You need many things beyond what your cows can milk. So you would exchange milk for, say, eggs from someone who reared chickens. Together you decide on a fair trade, and both get something you need. Win-win.
Bartering united groups on a macroscopic and microscopic level. In fact most of us have something in common that we’ve never considered. No matter where you’re from on the globe, your ancestors probably did some form of barter. So did mine. There may have been slight variations, but the general system was similar. Bartering is something that unites us all.
Barter served communities for centuries before the advent of money. It was a straightforward system that allowed people to get their basic necessities, or more. But it had its limitations, which is why the first monetary systems were introduced. Like everything in life, traditional bartering comes with both advantages and disadvantages.
Advantages
It levels the playing field:
It’s an equalizer of sorts. It allows for egalitarian access to services, in a way that monetary systems cannot. With barter - if you have no money, but you do have skills, you can trade your time and talents to get what you need. This is in stark contrast to money systems, where without currency, there’s not much you can do to get your necessities.
It connects people:
In order to exchange goods and services, people must interact. This interaction looked different across the globe but some groups, for example, held community markets where products were on display for trade. People would get to know each other and what they had on offer, thus connecting while exchanging value, in a less commercialized way.
Disadvantages
The biggest issue with traditional barter, is what we like what we call the ‘double-coincidence of wants’ - having to find someone who has what you want AND wants what you have. If you were a shoemaker in need of wood, you had to find a wood trader in want of shoes. This makes bartering inconvenient… unless you have a matchmaker.
Trust was another issue with bartering. If, for example, you needed milk - you had to trust the dairy farmer. You had to trust that the milk they gave you was safe and healthy to consume. There was not much opportunity for refunds then, so each transaction had to be 100% of integrity. That said, the booming sharing economy today is still built entirely on trust.
Another issue was around the idea of debt and owing. Let’s say one day you traded something worth two quarts of milk but you didn’t need two quarts of milk that day. This would mean the dairy farmer gave you one quart and promised the second one next week. You had to trust his word that he would have milk next week and that he would give you what is owed.
Last but not least - the valuation of goods and services became an issue. How do we fairly determine how much something is worth in exchange for something else? Valuation is never simple. It all became complicated and lacked scalability. Nevertheless, despite the issues, bartering still pops up in communities worldwide today.
Bartering Isn’t Completely Dead
Did you know there are communities – both online and offline – that still barter? The exact mechanisms and terminology may vary, but there are local groups, Facebook groups and forums where members still barter in some form to serve their needs.
There are a number of reasons why barter hasn’t died out, or been eradicated. The biggest one being - not everyone has enough money to get the things they need in the ‘normal’ way. That doesn’t mean they don’t have needs, and it doesn’t mean they don’t have means.
The system of bartering is inherently good, it excludes no one. And thankfully, technological advances make it possible to solve the above issues of traditional barter. Technology that allows for seamless peer to peer trading, so members can get what they need, and deserve.
THIS is exactly what we’re doing with Barterchain. We’ve built a platform that will bring back this ancient, simple system that served our ancestors for centuries. A platform that will bring back barter - and better than ever before.
If you’re still reading, you deserve to be one of the first to benefit from barter - and we are delighted to tell you our app is currently in beta! Early access will be invite only, so if you or any barterers you know want their names on our whitelist - leave your details at barterchain.io - and we’ll be in contact soon!