Money is any accepted unit or verifiable ledger that is used and accepted for transactions of goods and services, payments on debts, or tax collections inside a specific geographic area, nation, or union.
Money is defined as anything that functions in two way transactional exchanges, it can be measured in units in an account, deferred payments at a later date, and should act as some kind of a store of value over time. Anything that is a verifiable record that has all of these functions is money of some type.
Money has existed in some form through the barter of a specific item of esteemed value, commodities, ledgers, all the way to the modern blockchain of cryptocurrencies. Through most of human history money was considered silver and gold coinage and paper currencies that were used and accepted only when backed by one of these precious metals.
Almost all modern day national money systems use fiat currency for all transactions, and debts public and private. Fiat’s only value is the perception of usage for transactions as it has no intrinsic value and is not backed by any physical commodity like gold or silver. A country’s central bank can print money as it needs it and try to control the money supply in its banking system to keep inflation under control while also providing liquidity to the economy.
A countries currency holds value by the faith people have in the nation and its military power to maintain order. When there’s too much of a fiat currency printed for circulation then it loses its value as too much paper money is chasing a limited amount of goods and services. Currencies are values in comparison to other currencies and gold. A fiat currency is designed to go down in value over time as more of it is added to circulation.
Today most money is simply numbers valued in a currency that are on an electronic ledger inside a digital checking, savings, credit card, or brokerage account. The majority of transactions today are made with debit cards, credit cards, PayPal, or cryptocurrencies, along with bigger transactions using bank wire transfers.
Money is simply what you exchange for the things you want and what you are given for creating value for others.
