Wednesday, 11 May 2016

Barter system to Currency to Cards to Numbers



Leaving aside demand and supply, import and export, income, expenditure, marginal utilities and so on, the economics basically revolve around one rudimentary thing and that is - currency. The requirement of calculations of which we require the accounts to be studied as subject. The simple exchange of goods with goods became complex while trying to make it more convenient by inventing currencies. The complexities evolved with the unequal distribution of wealth,the creation of money, loans, interests, regulation of circulation of money in the market and different countries having different currencies with varied value creates further confusion.

When some people were barely able to comprehend the meaning of gold coins, the paper money comes in. Then they wonder how a piece of paper is so powerful in getting almost all goods and services. The acceptance of the paper money becomes normal and the functioning at the local level is understood barring the intricacies of the foreign currency exchange rates, valuation and insanity involved in printing the currencies.

Then comes the cards (debit, credit, master and visa) and the internet banking. The currencies are no more required. With the swipe of the cards just the number moves from one account to another. I pity myself and those people who do not understand the functioning of the moving numbers fully. This thing has come to stay and the faster we get used to it the better it is for us. Incidentally, these things are never taught in the schools and colleges – the practicality of the up-gradation of the barter systems, in the modern society.

One of my friend checked the balance using the the ATM across the border and he was so glad to see the visa card working in foreign ATM. When he tried the second time the balance did not match by couple of hundred Nu. Upon trying for the third time the balance decreased further and did not match. The mismatch between the second and the third was of equal amount Nu. 230. When the realization set in, it was too late and the service charge of using the ATM was already deducted from his account and the precious numbers moved away from his account.

On another occasion, perhaps due to up-gradation and migration of the system in our bank's software, the ATM across the border refuse to dispense the cash. And if you check the balance after coming back the amount would be debited – I mean the precious numbers would have already moved away from your account. It takes filling the forms and making a complaint to get back the numbers, which may take several days, to add on the numbers to your account.

Without education on these functions but with experience, people will be able to use it and comprehend it soon. Just like the electric mechanic that I came across, specialized in motor vehicle electricity, without any formal education. I had doubted about entrusting my car to such people but later I found out that he knows all about the colour coded electrical cables in the car. It was through experience he learnt all those, he told me. He even confided to me that he would be able to start the car without the keys, by fiddling with the electric cables, like in some hollywood movies. He was indeed better than most of the degree holders with immense theoretical knowledge.

The fund transfers can be done by making the numbers move through the smart phones. The salaries are paid with numbers directly into the account.And when we are able to understand all the intricacies of the moving numbers, there is something call 'Bitcoins' coming up.
google image - zindabad

With the growing trust in Bitcoins and the fundamentals of the Bitcoins would make the banking system collapse, and the economist may have to rewrite the new economics books. Bitcoins - by the way functions with peers to peers payments and no one controls it. Therefore, there are no hassles of fees and charges. The digital currency created by users.......oh wait .... I am having headache..