What is money, actually? - Crypto in Plain English - Episode 284 - by cryptohunt.it

What is money, actually?

We talk a lot about money, cryptocurrencies, tokens, and all that: But have you ever asked yourself what money actually is?

Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.

Money is a genius invention. Intuitively you fully understand WHAT you can do with it, but what is behind the idea may sound surprising.

Because money is really nothing more than a promise.

Let’s take a step back to understand. Imagine a world where there is no money. There, people will have to barter - which means exchanging items for each other. You may have a jug of milk and exchange it for a loaf of bread from someone else.

The problem is pretty obvious: It’s impractical. You may not have the right item to exchange on hand. What if you have beautiful flowers, but they don’t want them? No deal.

And this is a really big problem for any economy because markets can't be efficient - you both WANT to make a deal, but can’t do it.

So someone invented money, which is like a contract written on a piece of paper: I will always exchange this paper for a jug of milk for example. Or a loaf of bread. Now you can swap your milk into a paper, and the paper into that bread you wanted.

Usually, governments promise the value of this magic paper. They are huge economic players that can make or break markets with their promises. In crypto, governments have no say, and that is partially why crypto prices fluctuate so much: Instead of a guaranteed means of payment, they become an investment speculation.

And that is money: Just the promise of a really powerful entity, our government. And tomorrow we’ll talk about when that promise breaks, and why inflation happens.

This podcast is produced by Cryptohunt.it the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, Design is done by Carmen Rincon and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.