Baratto

Baratto, commonly translated as barter, is the direct exchange of goods or services without using money. It is a form of trade in which counterparties trade items of perceived equivalent value.

Baratto is one of the oldest trading methods, used in many ancient societies before coinage and later money became common. It continues in informal local markets, gift economies, and during times of currency instability.

A baratto arrangement requires a double coincidence of wants—the willingness of each party to exchange their good or service for the other. Valuation is informal, though some baratto systems assign unit values or use baratto credits to facilitate transactions. Transactions can involve goods, services, or a mix.

In contemporary economies, formal baratto exchanges and networks link businesses and individuals, often using an internal currency or credits and providing member accounts and transaction records. International associations promote practices, standards, and tax guidance. Baratto can cross borders via online platforms and local networks.

Baratto transactions are generally taxable, with the fair market value of goods or services received treated as income or revenue. Recordkeeping is important for tax compliance. Price discovery and valuation can be difficult, and there is potential for fraud or disputes if terms are unclear.