Understanding What Money Really Is

A lot of folks think the dollar is money, but honestly, it’s not real money at all. The dollar is just a fiat currency, and fiat currencies aren’t true money. When you start digging into Bitcoin, you end up learning about the Austrian School of Economics and writers like Carl Menger, Friedrich Hayek, and Murray Rothbard. That’s when things start to click about what money really is. It’s not something the government forces on us, nor is it just something everyone decided to accept. Money is picked by the market. The market goes for the commodity with the best qualities for money: scarcity, durability, divisibility, portability, recognizability, and the ability to hold value over time. Fiat currencies like the dollar? Nope, not real money. They’re basically a scam. For thousands of years, gold was the go-to choice for money. Then came the money changers and usurers, who started offering to store people’s cash in vaults. In exchange, they’d give out paper receipts. These receipts, known as banknotes, became a way to trade because no one wanted to go to the bank every time they needed cash. So, people started using those receipts instead of going back for their gold. The usurers figured out that most people wouldn’t return for their gold, so they began issuing more banknotes than they had gold to back them. This whole system has stuck around for almost 400 years now. The usurers gained the power to create money from nothing, and whoever controls the money can sway the media, politicians, and more.

This is the oldest preserved paper receipt, issued by money changers and usurers to people who deposited their money, silver, or gold. It is the so-called banknote, dating back to 1666. As far as I have researched, I have not seen any older example that has survived to this day. https://postimg.cc/1gF1FB24

This it true actually fiat aren’t money actually but bitcoin is right! Now can we put all that aside and think of how  volatile bitcoin price is within short time ? I totally understand your point, but thats how we’ve met the system. for our daily spending we actually need those papers and not those real money like gold and bitcoin you’ve mentioned.

Money in a simple definition is a medium of exchange, whatever that a buyer and a seller agrees that has value to give and take is money, it can be trade by batter, physical items that have value like gold, paper money that is recognized as a legal tender or recently digital currency like Bitcoin. Money in whatever form that it is acceptable is not a scam in itself but aside from decentralized currency a government or sn institution can manipulate the demand and supply and in the case of fiat they can print as much as they like which can devalue the currency. For your day to day use you can rely on fiat because it is generally acceptable in your region but for long term savings of money fiat have proven not to be trusted because it is prone to inflation. It is better to hold your money that you don't plan to spend within a short term in a valuable asset that you can liquidate into another asset or fiat. Long term proven assets like gold, silver, real estate and recently Bitcoin are part of money that are hedge against inflation from traditional currencies that are controlled by the government. Fiat is money but valuable assets are better money.

They’ll sounding like Bitcoin is way more better than gold, and would replace it sound. Forgetting the cons and just been focused on the pros. Firstly, the volatility of Bitcoin wouldn’t make bitcoin replace gold in years to come, Bitcoin technology may be topnotch, but that doesn’t make it qualify to replace gold. And as you said, we obviously need those fiat to spend, because we can’t be taking gold around for daily transactions, and we can’t as well trade daily with Bitcoin because of the volatility.

Money serves as an authorized medium of exchange, unit of account, and a store of value. It is widely used to buy goods, services and even paying debts. Therefore, fiat currency is still a form of money because its generally accepted not just by a single society but the whole universe, and its declared as a legal tender by governments. Digital currency like bitcoin is also a form of money, but not as accepted and globally adopted like fiat currency. But since it can serve as a good medium of exchange and has a high store of value especially it its hold for long term, then it wouldn't be surprising in the near future if bitcoin will gain global adoption and becomes a legal tender. It can even be a hedge against inflation like gold, in which fiat fails to perform.

It is not really that they forgot, it is more like they are deliberately ignoring it. As a Bitcoin investor, but I do not want to deny that Bitcoin will never surpass gold in market capitalization or replace it. That will never happen because they are not the same. They both have different applications and use cases. Another truth we need to accept is that whether fiat is money or not, we will continue to depend on and use it. Fiat will remain the main unit of account of the economy.

Anything that has value and that can be spent easily are called money, that makes fiat to also be part of the money, but it is not natural, it is artificially made by the government. Bitcoin, gold and many other assets that can also be spend are money, but they are better than fiat that are created by the government and their prices are determined by the government. Money like bitcoin and gold are not like that. There prices are determined by buying and selling. But what I do not like is that the government have let it be like fiat is the money but which is not true.

Traditionally we have received and depended on fiat. We rely on fiat for goods, services and all our needs. This is basically deliberate and government-imposed financial oppression. The sense in which you call fiat worthless is logical because we work hard to earn the amount of money that the government prints and releases on ordinary paper, but the inflation that is created by printing paper money in excess of demand reduces the value of previously accumulated funds. The government of almost every country has held the citizens of almost every country hostage in a complex equation of the economy. A global asset is a resource that is in demand. Your country's fiat is just a piece of paper. Global assets are gold, silver, bitcoin others physical asset that have intrinsic value and there is a huge demand for these assets. The demand and value of these assets in any country in the world is skyrocketing and the value will increase further in the future. Bitcoin is a volatile asset and this asset seems more acceptable for investment. Not to replace fiat, but rather I think Bitcoin as a decentralized financial system and fiat as a centralized financial system should coexist and complement each other.

From the beginning, I knew your post would be some kind of philosophical approach, with some kind of school of thoughts, but in the end, currencies are tagged money and they are valuable. Have the plenty of them and know what I mean, provided you use it well. Take the USD as an example, it is a form of money, so what money could hold as a value, the currency could buy it in its value/manifold. So what? In other words, get the money (currency) in excess, and you get the value, period! This is the main thing in life and economics, other than dragging and dragging.

Personally, I find it difficult to give a universal definition of money. 🙋 Money is, in my opinion, an entity that has repeatedly transformed itself. I would even say that there is an evolution of money (just like biological evolution). Money is an entity that, through the process of evolution, strives to become as light, immaterial, and mobile as possible... Money as an entity tends to move from one person (legal entity, algorithm, etc.) to another person (legal entity, algorithm, etc.) at high speed. That's why moneylenders began exchanging gold coins for paper receipts (banknotes). Carrying a bag of gold coins is very inconvenient if you're setting out on a long and dangerous journey. You risk being robbed by bandits. But paper receipts (banknotes) can simply be put in your pocket. Similarly, paper banknotes were later replaced by digital cash.  I wouldn't be surprised if, in the future, financial transactions were carried out using the power of thought (using neural interfaces). I wouldn't categorically claim that fiat money isn't money. In my opinion, it's still money. However, non-cash fiat money lacks anonymity and privacy (which is a drawback). And paper bills are too tangible (which is also a drawback). Furthermore, fiat money isn't tied to an underlying asset (such as gold or silver). Cryptocurrencies like Bitcoin and Monero were created to address the shortcomings of fiat money. However, these cryptocurrencies also have their own drawbacks. For example, they're difficult to use directly to purchase goods and services (i.e., they're not liquid enough). This doesn't change the fact that they perform many of the functions of good money very well!

The end product of creating this slip as you said is so people won't have to return to collect their gold and but they can still use it to pay for goods and services right? No matter how many ideologies about money so many schools of thought can have about it, the main aim for it's creation is being met isn't it?  So even though you regard the dollar as scam, I believe if much of it is given to you, you won't think twice but to make use of it right? So no need for the long history. Although I appreciate the effort.

Previously it was a bond, or rather a gold ownership bond that you kept in the bank, but that was before Nixon changed the rules of the game which pioneered the dollar breaking away from Gold to meet the needs of money, because if they remained fixed with gold they would be very difficult to get money to build a government and also mining is not as easy as we mine sand to make buildings. So the dollar and others are still currencies now that are legally enforced, so with gold and Bitcoin it is hard money, gold is innate from antiquity and bitcoin is today's money, but still everything is money regardless of the value it has and views on it, in principle having a recognized exchange value it can be money.

That should be the simplest way of defining money to the lay man understanding. I don't understand why Op said dollar is not money. I have not heard this before. According to Adam Smith, money facilitate trade and it is the medium of exchange which is you have said. And another said it is exchangeable value. Everyone has their own view ahs how it uses. Base on it uses, "the exchange of good and services" is the most appropriate way to describe it.

You are right. It is not right to call it directly fraud. The government of a country will always want to have its own control . And the government also needs this control. Because there are all kinds of people in a country like good people and criminals live alongside them. So if the government cannot keep everything under its control, good people may not take advantage, but bad people will. The government will run the economy in its own way to run the country this is natural and logical. But the government of every country had a role in spreading this fiat currency around the world. Some have imposed it by force, while others have been forced to accept fiat currency instead of gold under pressure. This has never been good. However, since the world economy is now running on fiat currency, rules are being made through it and people have accepted it. On the other hand, its use is seen among those who think positively about bitcoin, but its use has not started everywhere yet.

I don't entirely agree. The world did not just get up to start using fiat money one day. There was a transition. The market generally accepted the paper, and little by little, the acceptance grew, so the government had to make a single general kind of paper that would be acceptable anywhere and by anyone in the country. The main definition of money is that it has to be acceptable to the people/market as a means of exchange, and even though it is something that is printed by the government today, it is still generally accepted as a means of payment. You may argue that it is flawed money that is devalued by inflation regularly, but it is still money. The money used in eras before paper money was not perfect, but it was still money. Some cities and regions were even forced to use coins with the faces of their emperors or kings on them, but since those currencies were generally acceptable anywhere within that territory, they were money. So the fact that the government currently controls fiat doesn't stop it from being money. Something can be a currency and inferior to another currency. In the same way, some fiat currencies are superior to other currencies, and in the same way, Bitcoin is superior to the fiat system. The fact that Bitcoin is superior does not make the fiat system not real money.

People all over the world are being fooled by fiat money. Where people used to use gold as currency when they thought it was valuable, now people use man-made paper as money. And the whole world is becoming slaves to this fiat money. And whenever people start dreaming of getting out of this bondage and running their economic activities independently through bitcoin, the government has been spreading rumors against bitcoin. I still think that if someone wants financial freedom in the future, they should hold bitcoin or gold.

Don't try to confuse people about what money is. Money can't change from what we know it to be as a medium of exchange for goods and services. Refused to have it and see whether you can be able to trade any single thing with it, even Bitcoin and gold you think of, you need money to buy them. You won't get them for free as their increase and decrease depends on how we transact with them with our money.

Thanks for sharing the story of fiat currencies. Something which was created with the purpose of making daily transactions and negotiations easier and more accessible ended as something to steal purchasing power from people along the time. The system where we are inserted, fiat currency is never enough. You may have 100 today, but tomorrow you will need 1000 of it to have access to the same goods and services you have today with 100 units of it. As result, we become slaves of this system and if we stop working, then it's going to be much worse. What I try to do is to exchange fiat currency into real assets and patrimony as soon as possible. Fiat is just a mean of exchange and shouldn't be held in big quantities.

As you said, the purpose of creating this slip is so that people don't have to come back to get their gold, but they can still use it to buy goods and services, right? No matter how many theories and thoughts there are about money, its creation basically serves its purpose, doesn't it? So, even if you think the dollar is a scam, I believe that if you were given a lot of it, you wouldn't think twice and start using it, right? So there's no need for a long history discussion. But I appreciate your effort.