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June 19, 2018

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The Story of Commerce (part 1)

September 18, 2017

 

 

Over thousands of years, commerce has progressed from simple trade to the complex buying and selling that occurs online every day. eCommerce fundamentally changed how people conduct both local and international trade. How did today's concept of commerce evolve? Where is it headed? Let's take a look at what commerce is, its history, and what the near future has to offer.

 

Commerce

noun  |  The exchange of goods, services or something of value, between individuals, businesses, or other entities.

 

The history of commerce is the history of human civilization. No civilized community produces all the things which it consumes and some of its needs must be supplied by exchanging with other communities, this is the beginning of commerce. Moreover, it may be impossible for a nation to produce all that it needs to consume, owing to physical peculiarities of the nation, its lack of resources, climate, etc. 

 

The use of barter-like methods may date back to at least 100,000 years ago. Commodity-money originated around 5,000 years ago in Mesopotamia with the Shekel, a unit of weight, and relied on the mass of approximately 160 grains of barley. Societies in the Americas, Asia, Africa and Australia used particular sea shells as money. Commodity-money has intrinsic value in the money itself. For example, a gold coin is worth it’s weight in gold.

Over time money evolved into representative money, or paper notes which represented value. For example, a paper note or receipt which can be redeemed for gold. In 1971 the U.S. government suspended the convertibility of the U.S. dollar to gold and much of the world switched from representative money to what is called fiat currency. This form of money is backed only by the governments' fiat of legal tender, the ability to convert the money into goods via payment, and demand created via taxes. 

 

With the invention of the internet, a new technology emerged which is yet again changing how civilizations use money. Blockchain technology gave rise to a new era of cryptocurrency, digital tokens representing real value. Unlike email or paper money which can be copied or printedendlessly, cryptocurrencies cannot be counterfeited. A total supply can also be set with cryptocurrency, completely eliminating the possibility of minting any new coins, much like how it is impossible to simply print more gold. Cryptocurrencies also eliminate the need for middle-men like banks to facilitate a transaction, which costs a hefty fee and often days to clear. With blockchain technology, a person in France can securely and instantly send money to someone in Costa Rica just as easily as they can send them a text message.

So far, we have covered the rise of commerce and the evolution of money. Cryptocurrency and blockchain technology have incredible potential and later we will explore how Lantah will utilize both to usher in the new era of cryptocommerce

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