Money is used to back currency as a medium of exchange.
Money is something that holds it’s value, a medium of exchange, a unit of account; and a standard of deferred payment. A handful of firewood gives you the same amount of light and warmth every winter. On the other hand currency (also know as paper money/FIAT etc) pretends to be same thing, except the value of currency is dictated by entities, governments who is saying that currency has value. Like my wife said bitcoin is mass psychosis :), an even bigger mass psychosis is the FIAT currency
The population have been blinded and to expect trust from their government in their currencies, I mean they are running the country, why shouldn’t we trust them. More people are stepping back, looking at the world, questioning why we should be giving them our hard earned money, our time. Money has been exchanged for time since the beginning and we cant get that back
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It is a safe and scalable store of value that is easily carried.
Currency does not need to have intrinsic value or store of value, while money does store value; like Gold and Silver. Money has several aspects like portability, durability, divisibility, it is fungible and has a limited supply, like salt. On the other hand, currency has an unlimited supply so it’s value deminishes overtime.
Money is piece of paper physically and digitally just numbers that shows on your bank account and measurement tool for wealth.
1.A medium of exchange
Money is supposed to be stable, fungible, salable across time/space, communicate value, be used as a unit of account and medium of exchange. Today we use fiat as money. It is not good money.
Fiat is being eroded with inflation, but the illusion is harder to notice. When King Henry VIII debased England’s gold coins the citizens had a way of detecting it, via the weight, shine of the coin. Today, most money is digital on our online bank accounts, debit cards and credit cards. We have no way of detecting debasement through inflation without actually witnessing increased prices for goods/services.
Bitcoin is hard money. Better hard money than gold in today’s digital times. The world is becoming more digital, not less digital. While bitcoin has many characteristics of hard money it has not yet taken over as the world reserve money. But in my opinion it will (but I am biased).
I got an issue about discriminate a fungible and non fungible entity or token. I hear the gaming environment is non fungible but fiat money is fungible. But I misunderstanding is about the inflation so a dollar don’t get the same asset according the inflation. Someone won’t give me the same dollars over time. My today bread worth not the same dollar than next year. Is the inflation having an impact on fungible definition? @Arami_Alfarhani
Money is a trading tool that stores the economic energy that is your time and freedom.
Fiat money is ‘fungible’ because 1 usd that you own is equal to 1 usd I own.
1 usd = 1 usd.
ERC20 tokens in the Etherum ecosystem are fungible, because there is no distinction between 1 DAI token an another DAI token (or other ERC20).
ERC721 tokens however are called NFT (non fungible tokens) because each of these token is different from another. A good example are the famous CryptoKitties.
Bitcoin is not a fungible assert yet, because you can trace back a bitcoin since it’s origin.
Let’s assume that someone steals a Bitcoin and wants to sell it, its value would be much less compared to a ‘clean’ Bitcoin, which was not involved in an illicit activity.
A good explanation about Bitcoin fungibility is given here: https://academy.ivanontech.com/products/the-bitcoin-standard-course-history-of-money-and-bitcoin/categories/2873645/posts/9568364 (minute 2:30).
Please let me know if you have questions.
Happy learning,
Dani
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The best definition of money I have seen so far it is in the Mike Maloney series “Hidden Secrets Of Money”. I truly recommend everybody see it and share.
As quoted in the Money vs Currency - Hidden Secrets of Money Episode 1 by Mike Maloney:
‘Money is a trading tool that stores the economic energy that is your time and freedom’
Money carries all the properties of a currency in that it is a way of exchanging a unit of account, portable, durable, divisible and fungible/interchangeable and most importantly unlike currency it is a store of value safeguarded by the impacts of inflation.
(Correct me if I’m wrong)
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Money is any item that serves as a mean of exchange for goods and services given value by communal acceptance.
History has shown that items with the following properties serve better as money:
- scarce
- immutable, and\or non-perishable
- fungible
- portable
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As I understand so far studying this introductory course my humble concept of money is as follows:
Money is an agreed and acceptable uniform value based medium of exchange, a bridge between transactions. used for the exchange of goods or services.
A system that can be scaled when you add more & more services & goods into an economy.
Some of the key characters of money are:
Fungibility, divisibility, portability and durability.
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My question here is then why cryptos are defined as currency and not money?
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Money is the metric to quantify value in goods across the entire world.
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Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts
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I appreciate how you went into great depth to explain your views on Money, Currency, and Fiat currency. What you said was very informative. But, I kept looking for that magic word “intrinsic.” Your argument does not address intrinsic and how it plays a vital role in Money but does not play any role in currency or Fiat currency. Well, it does, I guess in the sense that you can burn it for fuel or use it for note paper or any other myriad of uses that paper might have, i.e., in the Loo, LOL! Currency or even Fiat Currency does not have “intrinsic” properties that give it value in and of itself. Money does not rely on backing or a promissory note to give it value. It is valuable on its own, with or without an endorsement or promise. When I understood this concept, that was my “Aha” moment with Bitcoin. Bitcoin definitely falls into the category of Money because it has intrinsic value due to the technical aspects inherent in its code.
Intrinsic speaks to the scarcity and therefore value because of that factor. i.e. your intrinsic value based on how many of you there are 