6: What is money?

Now, it would be remiss for me to not mention Robert Breedlove’s podcast: The “What is Money?” Show. His podcast which I can’t recommend enough, especially WiM001 - WiM009, in which Breedlove and Michael Saylor sit down and answer the question “What is Money.”

However, here, I’ll give some very basic frameworks to think in.

Historically, money must fulfill the roles of being:

• Medium of Exchange 

• Store of Value

• Unit of Account (ex: The Petrodollar)

Additionally, as Jason Maier outlines in his book A Progressive's Case for Bitcoin: A Path Toward a More Just, Equitable, and Peaceful World, the properties the “Federal Reserve Bank of St. Louis lists… in the teachers’ resources section of their website” for what defines good money include:

• “Durability (It has to last, not spoil or deteriorate)

• Portability (You have to be able to move it around)

• Divisibility and Aggregability (You need to be able to buy little things and big things too)

• Fungibility (The units need to be uniform)

• Scarcity (If there’s a lot of something, it won’t maintain value)

• Acceptability (People have to want it for you to use it)

• Verifiability (You don’t want a lot of counterfeit money)” 

Notably, Maier also argues that nowhere does it say (the Fed outline) good money should have intrinsic value, should be issued by the government, or that it should be able to be physically held, yet those are often the common arguments against bitcoin (+ energy story). 

Maier recognizes that it’s better that money doesn’t have intrinsic value because all money is trying to do is coordinate economic activity, so it’s better that it not have an intrinsic value which would cloud economic decisions, making it more difficult. He also rightly recognizes that when have you/adults ever held all the physical dollars tied to your/ their name.  Finally, for centuries the government was not involved with money; it’s only recent history this is the case.