Currency vs money
What if we told you those dollar bills in your pocket were not money? Well, they're not. The dollars in your pocket are the national currency of the United States.
THE IMPORTANT DIFFERENCE BETWEEN CURRENCY AND MONEY[1] | Currency | Money | |
---|---|---|---|
Medium of Exchange | Is able to be used as an intermediary in trade. | Yes | Yes |
Unit of Account | Is able to be numbered and counted. | Yes | Yes |
Durable | Has a long usable life. | Yes | Yes |
Divisible | It can be divided equally into smaller units (You can make change). | Yes | Yes |
Portable | It is easy to carry or transport. | Yes | Yes |
Fungible | Each unit is capable of mutual substitution, meaning units are of equal value
($1 in my wallet is worth the same as $1 in your wallet) |
Yes | Yes |
Store Of Value | Retains its purchasing power over long periods of time.
Only gold and silver have been money throughout history. |
No | Yes |
Currency
Currency is a form of money with 3 main functions: a unit of account, medium of exchange, and store of value. Note that in Currency vs money is stated that currency is not money because it is not store of value OVER A LONG PERIOD OF TIME, but it is store of value over short period of time. This is why Lindy Effect is important (this is sentence in money also).
There are national currencies. Some well-known national currencies are:
- the United States dollar
- the Euro
- the British pound
- Chinese Yuan
- Japan Yen
- Russian Ruble
Currency is not money (see currency vs money).
- ↑ From teachings of Mike Maloney https://goldsilver.com/getting-started-guide/chapter-one/