What is money anyway?

By jer979!! | | 14 Dec 2021

tl;dr: spolier alert- it’s what we say it is.

Recently, I’ve been settling accounts with different people using different tokens from different chains.

One person owed me a $100 so instead of PayPal, he sent me some Solana.

Another person and I were doing a trade and we settled it in XRD.

I do this because it’s an easier way of getting a little bit of money on different chains so I can experiment with the capabilities of each of them.

As I did each of these transactions, I was conscious that my definition of “money” was expanding. If I believe that Solana is worth $100, then I’m willing to take it as payment instead of USDC.

Granted, some of these are conscious risks and I’m willing to lose the $100 worth of SOL, but the same could be said for an “investment” that is based in USD.

All of this comes to mind because of a recent clip that made the rounds of IMF President Christine Lagarde boldly proclaiming that “cryptos are not money.”

For me, this may be more wishful thinking on her part than the reality which is that, for more and more people, that’s exactly what they are.

I’m sure analysts of body language will have a field day watching her reaction to the question as well. I found it noteworthy, but that may be wishful thinking on my part.

The larger point, though, is that, anything can be money (a means of exchange, a unit of account, a store of value) if more than 2 people believe it to be.

And the MORE people who believe it, the more valuable the money is because of its wider acceptance and larger utility.

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