Ideas & Insights: Blockchain & Bartering

When you think of bartering, what is it that enables you, or stops you, from participating in the process?

For me, the largest possible drawback to bartering is that, from my own personal experiences, is that I feel like I never fully know who I am dealing with, or what the quality of the item I’m dealing with actually is.

With that in mind, and in reference to Blockchain technologies, I think the 21st century holds a very unique application of bartering processes- through the integration of Blockchain authentication.

With regards to who you are dealing with in a barter, past third party verification which may prove unnecessary, Blockchain offers us the chance to create a ledger within a greater network to track and appraise the status and history of the person we are trading with (for me, if I am ever buying something online or kijiji, something I personally like to do is to try and find their Facebook- to get a better feel of the person). Imagine if we could view transaction history in a more neutral and salient way, if financial red flags could be automated, and the appropriate information within a trade could be shared if need be- with information not needed for the trade hidden, but stored in the network.

The other application of Blockchain technology within bartering is through the authentication of product history itself. We could potentially, through tracking the point of origin and point of last re-sale, get a picture of the item being traded and information on past transactions and notes on item states at these points.

What if it’s a service being traded? An immutable record and appraisal of services on a network is a wonderful step towards this (hello Elon Musk’s initiative to give journalists rankings based on “truthfulness”).

Whether it’s attempting to gain a more neutral outlook on someone’s trade history, the history of an item, a past appraisal of services, or if someone wants to ensure the deed to their house is mutually recognizable and its history traceable; I think, as with other innumerable applications that Blockchain technologies currently enable, we may see the concept of bartering becoming something more readily embraced by people within trading networks empowered with Blockchain. If we can utilize Blockchain technologies to authenticate, appraise, and appreciate the value of goods and services, one of the biggest risks in bartering is grossly cut down to size.

I’d go so far as to argue that we should seriously consider the integration of bartering into any future economy we imagine. I don’t think I’m the only one who imagines this by any means (even governments such as Ireland, France, and China are considering the creation of state sponsored barter networks). With regards to economic theory itself, anthropologists and economists are re-evaluating bartering’s place within the economic world. In his book Debt: The First 5000 year, anthropologist David Graeber discusses and challenges the idea that economics evolved neatly from barter based economies, to money based economies, to debt enabled economies. Instead, he makes the rather interesting argument, being observed by many anthropologists today that typically all three seem to exist congruently with each other in most historical economies.

In conclusion, what should one gain from this? Maybe one should reevaluate their views on Adam Smith; though past that, perhaps that bartering holds a greater pedestal within any economy than previously thought. With the advent of Blockchain, maybe it’s time to further enable that rediscovery of the lost art.