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Money

Money is literally stuff used to get stuff! :’) It is a form of barter in that a person exchanges one item (money) for another (a product or service). Money is both a physical and virtual technology and means of communication based on trust. Once it is trusted, it is adopted creating a trusted money network among participants.

In our case, the US dollar is trusted globally as money, thus it is used by a large network of individuals, businesses, and banks worldwide.

Money (as a base medium of exchange) was invented at least 10,000 years ago for setting prices and ownership claims. “Being a medium of exchange is the quintessential function that defines money,.. it is a good being exchanged for other goods” (R1) It allowed buyers and sellers to peg a numeric value to “units of account” (assets, liabilities, goods, and services) which moved trade from barter to commerce, because transactions could be settled and accounted for. Value tied to these units of account often represent some form of future productivity.

Common properties of money:

    • Store of value
    • Unit of account
    • Medium of exchange
    • Scalable and secure

For digital assets like Bitcoin – being scalable and secure are a very important part of this definition since those aspects are required for it to act as money between participants.

 

 

REFERENCES:

Money Throughout the Ages: *https://www.youtube.com/watch?v=r5eFObOFcME

(R1) The Bitcoin Standard by Saifedean Ammous (Pg#3) https://en.wikipedia.org/wiki/Unit_of_account

https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-421-stone-money-and-echoes-of-the-past

Title picture: Photo by Alexander Mils on Unsplash

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