Understanding Money Today we will briefly discuss money. Money is a medium of exchange. Is Bitcoin money? We can compare some other items that have been used as money, but for brevity, I will simply used gold. Gold has been the most widely recognize form of money throughout history. Gold definitely has these five characteristics. Does bitcoin have the five characteristics of money? Some argue that it does, whilst others claim it does not. The five characteristics of money are: Durability — Money needs to be lasting and durable to be used effectively. Does paper currency have this value? Attempts have been made by our government to make our currency more durable. If you have no access to a power source, is bitcoin durable for you? Portability — Is bitcoin portable? Can it be moved to the desired location that you want it to be in? Again, many variables and prerequisites must be met for bitcoin to have this characteristic while gold can be carried about in ones pocket. Assuming one has a pocket. What container do you port your bitcoin in? Divisibility — Is bitcoin divisible. Yes, it is definitely divisible. You need specific equipment or access to that equipment to make it divisible, but you also would have to divide gold in some manner as well. Much of the world does not have to the equipment necessary to divide bitcoin. Uniformity — Is one bitcoin the same as any other bitcoin? I do not know as I have never seen or held a bitcoin. I have held multiple ounces of gold in my hand that were stamped at the US mint and they were definitely uniform. As a matter of fact, of the hundreds I possess, they are all the same with the exception of the date on which they were minted. Bitcoin, or fractions thereof, can be traced through the blockchain on which they are recorded. My guess is that bitcoins are uniform if I had ever seen one. Limited Supply — Does bitcoin have a limited supply? Yes. There will only ever be 21 million bitcoin mined. However, no one knows what will happen after they have all been mined. With gold, energy is expended to mine additional gold, thereby expanding the supply as the economy grows. We will cover bitcoin mining, what it is, and how it is done, at another time. My personal opinion is that bitcoin is not and never will be money. I also do not believe that the paper “notes” in your pocket or cash, are not money. They are literally Federal Reserve Notes. A note is a debt instrument and has counter party risk. Money does not have that risk. FRNs (Federal Reserve Notes) are “fiat currency” meaning that it is declared legal tender by the government. “Fiat” means by decree. As we all know, or most of us know by now, the time of the government telling us “because I said so” is very shortly nearing an end. I want you to understand what money is so you can prepare yourself for what is coming in the near future, so you can alleviate the suffering that will be felt by many, and look forward to a better future. More information will be coming in the future to help you continue your education about what money is and some general economic theory. My hope is that you will live a better life by having this knowledge.