Money is the medium of Geld Uitleg that allows us to buy a loaf of bread or book a holiday without having to barter. It is a symbol of wealth that has no intrinsic value in itself but gets its value from being recognised as a means of payment and trusted to deliver the goods or services it represents. To be valuable money must have three basic functions; a store of value, a medium of exchange and a unit of account.
For something to be a valid store of value it must be durable (able to stand up to damage and decomposition), divisible (able to be broken down into smaller units), transportable (able to be easily carried from place to place) and non-counterfeit (able to be trusted to retain its value). It is important that money has these characteristics because otherwise it could not be used as a medium of exchange with people who live far away.
A currency is a type of money that gets its value from being backed by a commodity, such as gold. Paper money, on the other hand, gets its value from being accepted as a means of payment.
The Power of Money: How It Shapes Our Lives and Society
While money may look very different from the shells and skins that anchored our ancestors’ bartering, its main function has not changed much since then. It is an abstract social power enshrined in law and enforced by Government acting on behalf of the People. It only has value because the whole population agrees to accept it as such, so that they can work together for the common good.