What is Money

Money is at the core of our existence, historically money has served three purposes;

1: a store of value,

2: a medium of exchange, and

3: a unit of account.

Money is considered a store of value, where it can be used as a means of saving and allocating capital for future use.

Money acts as a medium of exchange, facilitating trade and economic activity. Money is something everyone is willing to accept in exchange for goods and services.

Money is a unit of account. A unit of account is something that can be used to value goods and services, record debts, and make calculations.

Over the centuries there have been different forms of money from cowries to metals to coins and paper-printed money known as Fiat.

Fiat money is government-issued currency that is not backed by a physical commodity but by the stability of the issuing government.

Money has evolved over the last millennia and we are in the digital phase. Bitcoin is primarily an innovation on money, an alternative form of money, a better form of money.

What Is the Difference Between Money and Currency?

Money and currency often seem interchangeable, but they hold unique roles in the economic system. Think of money as a concept: it's a medium of exchange that allows us to purchase goods and services without needing to swap items directly. On the other hand, currency is a physical representation of money, like coins and bills, that a Government has declared legal tender.

In the next chapter we dive into the history of money, you see money is as old as humanity, it is fundamental to our lives and living.