The barter system is one of the earliest stages where man become a commercial living organism. In fact, in today‚Äôs date, you will find the practice of barter system to be practiced in some interior parts of African countries and in some underdeveloped regions of India.
A barter system economy is not depended upon paper notes or coins. Instead, people practice a direct exchange of goods for other goods. In the earlier days, people used to exchange their cattle. However, this method of exchange is not as easy as it sounds in the theory. Many difficulties are faced when you are exchanging more complex items. It is very hard to determine the value of a product with another product. You cannot sell a pig to get a horse.
As the years passed, our society also became more civilized than ever before. It became more difficult and complicated to use the barter system to use in a larger distance. For example, you cannot buy another cow by bringing your cow hundreds of kilometers away. As a result, metals were used to trade goods. Metals like Gold, platinum, silver, bronze, copper were used to buy new products. This was the time when the first modern currency was introduced to the people. To give more mobility to this system, paper notes were introduced to the monetary system.