Money is something that people use to purchase goods. They can use it in exchange for goods. Today, money comes in three forms: coins, paper, and credit.
Money is something that can store value over time, be devisable meaning broken down into minute parts or fractions of a whole, and then be brought back together again. It must be a cross-platform medium of exchange. Meaning it must be interchangeable across all regions and cultures. Money must be pegged to something that the populous believes in. Something that holds empty promises is something that cannot be held as value.
Money has all of the currency’s features, but in additional has store of value.
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From what I understand Money stores a value because it is scarce such as gold whereas Currency is paper that is worthless as it doesn’t store a value it only has a value because governments say it has
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Money is the stored value of currency that is built over a long period of time. By acquiring money, one can accumulate it as well as other assets/ wealth that money can buy. So a view of money should focus less on the currency/fiat and consider its worth over time.
What is Money?
Money is a medium of exchange anything that people use to buy goods and services or receive for selling goods and services .
money is a way to store value to use at another time.
Money is an economic unit that possess a value and utilized as a medium of exchange to make transactions more efficient and convenient thanks to its portability and divisibility. Of course, the value of money is depended on its scarcity and durability. For example, gold is a scare precious metal that is extremely durable, whereas metals like iron are not so scare and very not durable; as rusted iron will have less value than a newly mined iron. Therefore, money also needs to be fungible; meaning that the same one ounce gold as a bar is equivalent to one ounce of gold in coins.
‘Fiat’ currency is often branded as money, but in reality, it has no value that is backed up by. Currency depends on the amount of printed banknotes in the circulation. Fiat currency, unlike gold or cryptomoney, are not scarce, since the bank or FED can print more money out of thin air, thus causing in the long run a hyperinflation. Money is also hard to be counterfeited, unlike paper “money”, which is easy to counterfeit, henceforth governments passed laws to punish unlicensed printers, because as mentioned before, more new money in the circulation will cause economic damages in which prices can skyrocket from day one to day two. Some may say Gold can be counterfeited. Wrong, what you are talking about is called debasement, which is a process to decrease the consistence of gold or silver in a coin and substitute that void with less precious metals such as copper. (e.g. “copper nose”) Of course, the government made an artificial law structure to make one gold coin dollar equivalent to a one debased coin dollar. Here comes something we call the Gresham’s law: It is stated that the introduction of ‘bad money’ will drive out ‘good money’ from the circulation. He’s absolutely right, because a person will not sacrifice his gold Loonie for a either a newly debased Loonie or a worn off Loonie. When that person makes a purchase, he or she will make sure to use the ‘bad money’ for transactions and save the more valuable coin for the future, as gold and silver unlike fiat currency have a higher value and its price can change time to time; and therefore, precious metals in savings is more secure than paper money in your savings account. In short, you’re almost hyperinflation-free with gold. I personally like to consider ‘fiat’ currency as fake money, despite its convenience, fungibility, divisibility, and easy utilization. Like mentioned before, all it takes to ruin the economy is printing more money or adding more 0s digitally. In Canada, due to COVID19, the government had to print more money to “aid the recently laid off population with CERB”.
I see cryptocurrency more secure and valuable as I learned the cyptomoney needs to be mined, not literally mining like gold of course, but it has the same concept. In the cryptoeconomy, mining is the process in which powerful computers solve very complex computational math problems. Once it is solved, that data will become a hash in which it is put in a block and added to the blockchain. Mining cryptomoney has a very low probability, almost one in a trillion chances. This makes cryptomoney scarce, and scarcity versus high demand, makes it more valuable over time. Some folks like to call them, for example BitCoin, as digital gold. In other words, unlike fiat currency, cryptocurrency has its own backed up value. Countfeiting crypto is as hard as somebody wants to counterfeit gold, the criminal is more off with printing new currency if cheating is their ultimate goal.
Sorry for the TL;DR post. I hope you guys find my input to this discussion informative. I still feel like I have a lot to learn and I am absolutely enjoying my lectures so far. I have a clearer vision about the world and getting rid of my ignorance (i.e. lack of knowledge) is truly rewarding. I cannot believe that all this time I’ve been chasing the fake money and allowed myself fed with lies such as “who needs Gold?” or “Bitcoin isn’t real money”. Last week, I had a friendly argument with my co-worker and he called me “financially illiterate” because he said I was wrong when I told him “fiat currency isn’t backed up by anything”, he then told me that “it is backed up by gold, and the value of the currency depends how much gold the nation has in its reverse”. I know he’s wrong, but why argue with unreasonable disagreements, am I right?
If I am wrong in anything, please be free to correct me. I value constructive criticism.
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Last week, I had a friendly argument with my co-worker and he called me “financially illiterate” because he said I was wrong when I told him “fiat currency isn’t backed up by anything”, he then told me that “it is backed up by gold, and the value of the currency depends how much gold the nation has in its reverse”. I know he’s wrong, but why argue with unreasonable disagreements, am I right?
So annoying when it happens.
I agree that sometimes is better to just stop debate, hopefully you made him curious and he will do more researches.
Let us know if he comes back one day 
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Money is:
A store of value.
A unit measure.
A medium of exchange.
Fungible.
We need decentralized common currencies that meet all these requirements.
If we are going to do UBI, best to do it in the private sector with cryptography in a decentralized way; before the political class and the central banks do it and get yet more leverage over mankind.
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Money is store of value, and is referred to something with actual worth (silver or gold)which has typically been used to back up currency.
Currency - is an item that has been given authority by a form of government to act as form of exchange, although it’s worth is nothing.
From my point of view, the main function of money is a store of value. Regrettably it is completely unclear which asset has this property today. Gold practically did not rise in price from 1979 to 2006. Was it a good store of value for an active generation in those years? I doubt it.
Currency today has largely lost even the property of a unit of account. It only seems to you that you have currency. In fact, at any time the bank can block the account, not transfer your money abroad, etc.
The question economist and scholars looked to solve for years. What we know of money is it has to answer these specific characteristics which are; a store of value, divisible in small quantities, portable where you can fit it in your pocket, fungible, and most importantly does it last for a long period of time. This is important to understand because really it’s biased. I believe that money gets its value by the scarcity and the use cases. For example, gold is a beautiful example. You can use gold for jewelry which rappers love to show off, just like in Thailand in 2020 where the overconsumption of gold caused a massive selloff, and lines similar to what you would see in a great depression. Quantitative easing that Janet Yellen loves to do and the massive increase of printing for the stimulus bill is really causing a bubble due to inflation. These feds need to maintain the amount of total debt in circulation with the amount of total currency in circulation because if not maintained a crash like 2008 happens due to the massive sell-offs and the value of multiple goods decreasing in price. This is where they got the term “bubble” because when it pops it does so swiftly which the market crashes fast. This is the worthless crap that we use in our system which is called “Currency” its real value is toilet paper after hyperinflation. Bitcoin has great value, but what is it linked to? If it’s not linked to gold and everyone’s reasoning is it’s gonna replace gold, but your computers in which you need the hardware to mine use gold. Now I understand that Bitcoin has value through POW, but its not a replacement for gold. What are some ideas?
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Bitcoin has value because the people give value to it.
In the first lessons of this course and in the book itself, the author gives lots of different examples of what was considered money (seashells for example).
What makes something a good form of money is not necessary how useful that thing is, rather how scarce and difficult to reproduce that ‘thing’ is.
Bitcoin is good form of money because is scarce and really difficult to produce, you cannot increase the quantity of bitcoin mined in each block, therefore no matter how much you invest in research of machines, you will never be able to mine more bitcoin that the code allows you to do.
Money is store of value, currency means nothing.
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Why would a god need to go to the trouble of dividing people into different languages just to stop it’s own creation (humans) from being like itself? Wouldn’t a truly supremely powerful being just be able to stop humans from doing that, just as humans are limited in many things (can’t fly like a bird, can’t read the mind of animals, can’t cure our own cancer, etc)?
Why would a god even need to limit humans at all? What threat could we possibly pose? Any threat or ill-consequences would ultimately come from that same god anyway, right?
Maybe different languages arose from humans living far apart, and associating different sounds with different ideas. Then as we spread and multiplied, different tribes encountered each other and discovered that there were different words for things. This seems more likely to me than the story of a god punishing people for building a tower.
However, if you want to keep people obedient, subservient and explain why other cultures exist, the Tower of Babel is a great story to feed them.
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What is Money?
Money should be consider storage of value at its core not just a means of daily exchange or unit or currency. Because money value will remain compared to many historic currencies that had gone to zero.
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A store of value determined by multiple metrics used for executing transactions through various exchange methods as well as a warehouse to weather volatility of alternate currencies.
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I understand how people increasingly see the “inherent” value in bit coin, more than anything else that has arisen as a “proposed” substitute, or replacement for gold; especially when you judge it against the criteria in this series of lectures. The main arguments are that it can be used as a far superior databas to previous models,transactions being permanent and unable to be distorted or manipulated, transparent and available to everyone, everywhere.
Things that still concern me, as to whether it can sustain this inherent value are that we don’t know if mining bit coin, will still be as attractive, whenthe block reward disappears once all 21 million are mined. If there are troo few miners, will it start to run less efficiently as a database and If fees increase as a result, will people want to use it any more, as a means of exchange, as this has been a problem in the past. Bit coin will increasingly have to compete with the other cryptro currencies, and miners might find mining on other block chains more attractive after tthis period.
Will the sheer amount of energy required to mine become a stumbling block as this need increases in the next few years?
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good questions, wondering the same…
also… with such a limited supply both btc and gold are considered a luxury and for all- exclusivity to have… how will this change in the future?
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¨Money is just data that allows us to avoid the inconvenience of barter¨
¨That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.¨ -Elon Musk
That is of course bitcoin.
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