“Hello, Mount Maven community! We’re here to empower you with knowledge and clarity, and today, we’re talking about a topic crucial to every entrepreneur: money. We’ll explore what money is, its history, and how it might evolve. We’ll also delve into the functions of money and the different types of money that exist. So, let’s dive in!”
What is money?
“Money, as defined by Merriam-Webster, is generally accepted as a medium of exchange, a measure of value, or a means of payment[1]. It’s a tool that allows people and businesses to obtain what they need to live and thrive[5]. Money is valuable because it represents something valuable to us, and it’s a socially accepted standard unit with which things are priced[5].”
History of money
“Money has been a part of human history for at least 3000 years[6]. Before money, people bartered, directly exchanging goods and services[6]. China was the world’s oldest known coin minting site, which began striking spade coins around 640 BCE[6]. Over time, we moved from bartering to minting coins to printing paper money, and now, we’re moving into digital forms of payment[6].”
Functions of money
“Money serves three main functions. First, it acts as a medium of exchange, facilitating transactions and eliminating the need for barter, which requires a double coincidence of wants[3]. Second, money is a store of value, allowing people to save wealth over time[3]. Lastly, it functions as a unit of account, enabling people to compare the worth of different items[3].”
Types of money
“There are four major types of money: Commodity Money, Fiat Money, Fiduciary Money, and Commercial Bank Money[6]. Commodity money is any physical object that has value in and of itself and can be used as money, like gold or silver[6]. Like our modern currencies, Fiat money has value because a government maintains its value or because two parties agree to use it as an exchange medium[6]. Fiduciary money includes banknotes and digital currencies such as credit cards and electronic fund transfers [6]. Commercial bank money is the money that exists in bank accounts[6].”
Future of money
“The future of money is exciting and full of possibilities. We’re shifting towards digital transactions, with cryptocurrencies gaining popularity[7]. As these digital currencies continue to emerge, central banks are reacting by developing their own more stable forms[7]. This shift towards digital currencies could improve efficiency, flexibility, and market access, particularly for the unbanked[7]. However, it also comes with risks, including market instability, minimal accountability, and decreased privacy[7].”
Summary
“So, as entrepreneurs, it’s crucial to understand money: its definition, history, potential future, functions, and the different types. This knowledge can empower us to make informed decisions and navigate the financial landscape. Remember, knowledge is power, and here at Mount Maven, we’re all about empowering you. Until next time, keep climbing!”
Citations:
[2] https://www.forex.com/en/news-and-analysis/types-of-money/
[3] https://www.cliffsnotes.com/study-guides/economics/money-and-banking/functions-of-money
[4] https://www.investopedia.com/insights/what-is-money/
[5] https://www.investopedia.com/terms/m/money.asp
[6] https://sites.google.com/somaiya.edu/macro-econimics/money/types-of-money
[7] https://corporatefinanceinstitute.com/resources/economics/functions-of-money/
[8] https://en.wikipedia.org/wiki/Money
[10] https://www.linkedin.com/pulse/understanding-4-types-money-sunil-tudu
[12] https://www.firstbanknigeria.com/basic-types-of-money/
[13] https://byjus.com/commerce/functions-of-money/
[14] https://www.studysmarter.co.uk/explanations/macroeconomics/financial-sector/types-of-money/