The system of bartering is an old method of exchange, used for centuries--dating all the way back to 6000 BC. Long before the good old greenback was invented, people exchanged items they no longer needed or had an excess of, for things they required or wanted. They also learned to exchange laborious tasks based on individual skills.
At times, even human skulls were used as well! Salt was another popular item exchanged. Salt was so valuable that often Roman soldiers' salaries were paid with it. In ancient times, the system of bartering was mostly contained within one’s village or the trader’s geographical area, however, in today's day and age, bartering has become global.
Today, bartering uses techniques that are much more sophisticated then way back then. The internet has increased the ability for people to reach a much broader audience through such means as online auctions, swap networks and barter exchange websites. Homes are even now exchanged when people are travelling and multimillion dollar corporations are getting in on the action.
you are trading with, having no consumer protection or warranties involved for poor or defective items, traders are required to have good bartering skills in order to obtain full value for their item, both parties need to have what the other wants in order for any exchange to occur, under or over estimation of the goods value is possible as there is no common measure of value, indivisibility of certain goods comes into play if one has an item worth great value, lack of organization for deferred payments, difficulty in storing wealth and of course, bartering with language barriers. When money was invented, bartering did not end, it merely becomes more organized.
During times of financial crisis, bartering tended to resurface. Since most people engaging in trade knew each other and were trading in the same geographical area, the extension of credit was eventually given. During the Great Depression, the fine details of this rudimentary credit method were expanded and thoroughly organized through businesses who acted similarly to banks. If any items were sold, the owner would receive credit and the buyer's account would be debited. While one-to-one bartering was the norm, organized barter exchanges also advanced to include third party bartering. Modern barter and trade has continued to evolve considerably and now has become an effective method of increasing sales, conserving cash and moving inventory. Small transaction fees usually apply covering some of the organizer’s expense as well as monthly statements are provided to each member.
There is a growing amount of exchange markets on the global front. Michael Linton founded LETS (local exchange trading system) in 1983 in the Comox Valley in Courtenay, British Columbia. Today, hundreds of thousands of small to medium businesses all over the world are involved in this massive online barter exchange economy.
There are approximately 400 commercial and corporate companies also bartering their way across the world, including Tradebank in Canada, International Money Systems in the U.S. and Bartercard serving Australia, New Zealand, Cyprus, United Kingdom, United States, UAE, and Thailand. As far as tax implications go, at this time, the United States is the only country wanting a piece of the tax pie. Other countries have not yet implemented any laws requiring their citizens to report any “earnings” from barter transactions.