What is money?
Onramp Fundamentals Series – Chapter I
Medium of exchange. Unit of account. Store of value.
That’s the textbook definition of what money is. But really, those are the functions money serves once an economic good has emerged as money in a society.
Money is often the most salable good in an economy. The most salable good is the one that almost anyone will accept in exchange for almost anything else.
What are the attributes that tend to make an economic good salable?
All of these goods have been used as money at some point in history. We get the English word salary from the Latin salarium, which referred to a Roman soldier’s allowance to buy salt.
Salt, silver, gold, and bitcoin are all commodity monies. A commodity is an asset without an issuer.
Fiat is credit money. A big, complicated web of IOUs.
Besides being used as money at some point, what do all of these goods have in common?
They are all ledgers. A ledger is a summary of transactions used to keep track of who owns what (1).
Whether you’re considering gold, fiat, or bitcoin, money is a ledger.
But who, or what, controls the ledger?
Footnote 1: Lyn Alden, Broken Money, 1