Most people don’t even realize that money and currency are not the same thing. Although, people tend to see the similarities between each other, most of the times, they completely forget its differences.
Currency was invented to replace Gold as an independent, natural medium of exchange and it has been maintained by governments. Currency has no limited supply and governments have been using this key feature to take value out from thin air. On the other hand, money came before currency. By definition, currency is inflationary and tends to lose value. The difference between currency and money is important because the global economy is increasingly unstable under a process based on fiat induced debt.
- Units of account
- Medium of exchange
Money and Currency have the same components other than one very important one. Money has the ability to store value. All Fiat currencies do not store value. If they did then you would still be able to buy the same amount of things you could have bought in 1920 with $1 as you could today. And we all know that is not possible. But to show you the real difference, 1 ounce of gold or silver in 1920 can still purchase the same items today. Currency is everything money is, except a store of value over a long period. That is the difference between currency and money. Money is a stable store of value and maintains consistent purchasing power over time.
Fiat currencies are built on trust. In fact, currency isn’t backed by anything of intrinsic value, and governments tend to deflate the value of fiat currency in order to take out value by issuing more currency.
Despite the volatility, gold has been able to maintain its value for centuries while currency has been devaluating since its first appearance. In this sense, Gold is a much more effective way of storing value. Considering this analysis and the fact that Bitcoin is the “digital Gold”, we can say that both gold and bitcoin are real forms of money and a much better store of value than any fiat currency.
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