> Posted by Danielle Piskadlo, Manager, Investing in Inclusive Finance, CFI

Growing up, my father fixed cars in exchange for payment in whatever form his customers could afford – granite tables, sheep skin rugs, and so on. In our town, he was the king of barter. Unfortunately, it was rather difficult for my mother to re-barter these items for things our family actually needed, like food and clothes. The system was limited in participants and so in utility. But thanks to the internet, the art of barter is back.

Online trading or barter sites, like Listia or BarterQuest, now let you post items you are ready to part with – say granite tables and sheep skin rugs – and then users on the site bid on them with points they have earned. Once the item is “sold,” or rather traded, you mail it off and then you have the points earned from that trade to bid on other items on the site. No formal currency is involved, although the points in effect become a virtual currency. This form of trading is based on the principle that one person’s trash is another person’s treasure and it works only because the internet makes the dumpster big enough. The same principle is true on travel sites like HomeSwap where you offer your home in exchange for someone else’s home and agree to swap without any payment involved.

You could even see how this type of barter system might one day make its way into the business model of companies like Airbnb or Uber. As of now, these services allow individuals to offer up a room or ride in exchange for money. Pehaps these transactions could also be facilitated without money. I could just as easily offer a room in my home to earn points instead. Once I have enough points, I could use them towards a room in Hawaii for a vacation. There must be some people somewhere in the internet barter system who want to come to Boston for a few days.

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