1. Barter System

5000 years ago our ancestors made transactions by bartering, exchanging one item for another. This payment system is also Non-Fungible because it exchanges 1 item for another without a clear reference.

An example of a barter payment system: Mr A exchanges an apple with Mr B who has a loaf of bread, they both exchange their two belongings because they need each other. In the end there was a payment that was recognized by both parties.

However, this payment system is considered inefficient, for example Mr. A wants to exchange bread with Mr. B who owns sheep, will they make an exchange? Probably not, because it is realistic that a lamb costs more than a loaf of bread. But does Mr B cut off his leg of lamb to get a loaf of bread? of course not.

This is why the barter payment system is considered inefficient.

2. Payment System Using Gold

Gold is considered a material capable of storing one's wealth because it is eternal, this material cannot be destroyed from the face of the earth. In addition, gold also has a fixed supply. Our ancestors switched from a barter payment system to a payment system using gold. However, even this payment system is considered to be inefficient because gold has a shape and weight.

For example, Mr. A wants to shop at the market, then Mr. A needs to bring quite a lot and heavy gold so that it can cause crimes from individuals who want to commit robbery because Mr. A seems to have the gold he is carrying.

3. The payment system uses money that is backed up by gold

After the discovery of paper in China, the payment system evolved again by using banknotes that were backed up by gold for every $1 of money issued by the bank, there was always $1 worth of gold held by the bank. So, indirectly this paper money is a certificate of gold ownership, the aim is to streamline transactions, so there is no need to bring gold anymore to buy something.

Just go to the bank and exchange your gold and you will get banknotes that are backed up by gold. And vice versa, if you want to get the gold back, just return the paper money to the bank and you will get your gold. Before 1950, Americans used this system and their dollars were called 'Green Bucks'.

4. Fiat Money (Not backed up by anything and with trust)

In 1950, American President Nixon announced to the world that their dollar was no longer backed by gold, but only trust. Before 1950 there was also gold robbery by banks to American citizens 'subtly', but we will not discuss this here. Until now, fiat money still maintains its existence.

5. Cryptocurrencies

Fiat money is notorious for not having a fixed supply, making it vulnerable to inflation and also controlled by central authorities. Just imagine that 40% of the dollars circulating in the world were printed only in 2020 for the purpose of recovering the economy due to the Covid-19 pandemic by providing stimulus. In 2008 there was an economic downturn, the trigger for which was the collapse of Lehman Brothers.

This incident gave a domino effect to the world community and caused a monetary crisis. Property destroyed, inflation continues to increase.

Then came a 'person' who made Bitcoin as a form of distrust of the financial system at that time which was controlled by a centralized authority. Until now, crypto continues to grow, but it is still said that crypto is not yet ripe to be used as a means of payment because it is still very volatile, just like gold in the past.

But this is the revolution of the payment system, in the future crypto & blockchain will be able to synergize with the current payment system.