What is money and what is the role of banks?

Money is any item or medium of exchange that symbolizes perceived value. As a result, it is accepted by people for the payment of goods and services. Crypto is the evolution of money.

Money is an essential part of our everyday lives. It is a fascinating subject with a long and complicated history. From barter to bitcoin and cryptocurrencies, money has taken many forms over the centuries. While its form has changed, its main purpose remains the same: to make trade easier and more efficient.

Most people would say that money is simply a medium of exchange – something that can be used to buy and sell goods and services. But money is much more than that. It is also a store of value and a unit of account. And its history is fascinating, dating back thousands of years.

The money we use today is fiat money, which is money that a government has declared to be legal tender and is not backed by anything. The value of fiat money is based on faith. If people lose faith in a particular currency, it will no longer be worth anything.

Fiat money is legal tender because the government says it is, not because it has any intrinsic value. The only thing that gives fiat money value is the fact that the government requires its citizens to use it to pay taxes.

The money supply is the total amount of money in circulation at any given time. The money supply is controlled by a country’s central bank. Central banks can increase or decrease the money supply by buying or selling government bonds on the open market.

Today, most money (>95%) is digital money that exists only in computers and banks’ servers, which is simply a record of money that is held in a bank account. This money can be transferred between accounts using computers and the internet.

Banks play a crucial role in the economy – they are responsible for keeping our money safe, lending money to businesses and individuals, and facilitating payments between people and businesses. But banks are also for-profit institutions, and they make money by charging fees and interest on loans, and by investing our money in financial markets.

The government may be responsible for regulating the banking system to try to keep it stable, but ultimately the banks are in control. In theory, they make sure that the banks don’t abuse their power. But in reality they let it happen, as history has proven, many times.

In a nutshell, the banks are in control of our money, and they use it how they see fit. They charge us fees, they lend it out at interest, and they print more money whenever they feel like it. There have been calls for greater regulation of banks, but we really need a banking system that is transparent, fair, and accountable – one that works for all and is not against the many.

Then in 2009, Bitcoin happened and changed everything. Most importantly, the basis of the concept of money.

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