Buyers and sellers are two sides of the same coin; one would not exist without the other. If the ownership of an asset is to move from one party to another, what is absolutely imperative is that there be a seller and a buyer. Once the intent is established, the asset in question needs to be valued, and once the valuation is acceptable to both parties, an exchange can take place.
Historically, some form of credit or the other has prevailed over barter, although both mediums of exchange are still in vogue. Cash or bank notes are essentially promissory notes albeit significantly less risky than their derivatives, no pun intended. It is, after all, a coin – metaphorically and literally – that separates a buyer from a seller.
The nature of buyers and sellers has constantly evolved over time, from individuals, to tribes, to communities, to enterprises and to governments. While the complexity of their trades has also evolved, from the real to the speculative, and from the physical to the virtual, what has remained constant is the need for credentials and tokens to complete the transaction.
Early commerce was restricted by design. Traders formed their own guilds and controlled commerce through membership to their respective marketplaces. The Greeks had their Agora and the Romans had their Forums. The Mexica market of Tlatelolco was the largest in the Americas back in the 15th century, and the Grand Bazaar in Istanbul is considered to be the oldest marketplace in operation.
As globalization moved apace, initially on the back of old-world imperialism, the desire grew to scale the marketplace without diluting membership for economic and geopolitical considerations. Explorers established trade routes, and merchants sailed before their navies, setting the groundwork for subsequent colonization. The Honourable East India Company, an English joint stock company that traces its formation back to 1600 and is largely credited for the British colonization of India, is also considered one of the forerunners of the modern sovereign funds.
The establishment of Company rule in India in the 18th century, or, acquisition of vast swaths of land across the African subcontinent by Chinese government-backed enterprises in the 21st century, raise strong arguments on both sides of the ideological fence but have common ground if viewed in the context of the desire to expand marketplaces.
From the forums to the sovereign funds, and from the trading pit to the electronic exchanges, credentials of buyers and sellers have and will continue to play a critical role in risk mitigation. State fiat in the form of early paper money was clearly a step towards finding a solution to help scale trade, effectively taking a closed loop credential-based marketplace that relied on membership to a more open loop token-based system that relied on acceptance and settlement.
Whether cash is viewed as a store-of-value or means-of-exchange, its position as an open loop token is unrivaled. That said, an open loop is not always desirable, and there are many different kinds of overt and covert transactions. As the evolution of commerce has shown, from cowry shells to bitcoins, human desire supported by ingenuity has no bounds when a trade needs to be completed.
Since we now live in an always-on, socially networked, flat omnicommerce world, and where buyers and sellers can be highly sophisticated institutions or individuals in the most remote parts of the world, one of the challenges will be managing the trade-off between a closed loop credential and an ever expanding marketplace. Based on the current methodologies, this would be a zero sum game. Eliminating this trade-off will be one of the most important innovations of our times.