Contemporary market and consumers

Contemporary market and consumers

Since the times of our ancestors, when even fire was a precious commodity, we have learned the secrets of the craft. We realized that none of us can be completely self-sufficient and therefore we have to give something in order to get something. So we learned to exchange our goods for those of others, using a system we called barter.

Invention of modern banks:
However, we quickly realized that the trading system didn’t really work due to the lack of a unified structure. In addition, we were unable to understand the diversity of goods and, above all, the “double convergence of needs” created serious problems. Furthermore, it has also been observed that there is no divisibility in this barter system. This made things even more complicated and trading became impossible. However, the need for trade remained.

So we immediately started looking for ways to structure our methods. We tried to find a form of a universally interchangeable good there. Some thought it could be rice, others thought it could be stones, and still others thought it could be shells, but in the end they all failed. It also became a fact that anything that was to be used as a commodity had to be limited in quantity. This scarcity was necessary for a commodity to become a common medium of exchange. So we quickly realized that gemstones were rare enough to function as a common trading product.

This started to work well until people realized that these gemstones were heavy and difficult to split. For this reason, some goldsmiths have started offering gold storage services to individuals. They issued a receipt certifying the value of the gold that a particular person kept in his house. These receipts can be given to another person in exchange for certain services or products, and that person can then exchange this receipt with a goldsmith to obtain the gold. This is how the world’s first banknotes were created, which quickly developed into better currencies.