If you have swapped an unneeded wallet or handbag with a friend in return for, say, an attractive sweater, you have bartered.
Bartering, the exchanging of goods or services, was used long before any currency was invented. Its recorded history goes all the way back to 6000 BC introduced by the tribes of Mesopotamia and spread to the Phoenicians who bartered goods at city ports around the Mediterranean.
Although today there are some cultures still leaning on bartered exchanges for goods and services, it is not something that any society or economy relies on entirely. The monetary system’s great value is that it is an exchange medium that people accept and understand as payment for commodities they sell or purchase.
Using money for trade simplifies transactions significantly.
But the present-day advantage of bartering is that even people without money can exchange what they have for something they need. For example, if your friend has a skateboard you want, and his/her bicycle needs work, if you are good at fixing things, you could offer to fix the bike in exchange for the skateboard.
Another example is that you could agree to perform construction work for someone in exchange for supplies and materials that you will need for a future use. When you choose to barter to meet your current needs, you can save money for other purposes.
Due to lack of money, bartering became popular again during the Great Depression in the 1930s to obtain food and services. It was done between people, or groups, who acted similarly to banks. If items were sold in barter, the seller would receive credit from debiting the buyer’s barter account.