Money is Nothing but It is Everything
Money is nothing but it is an official-issued, legal tender, generally consisting of currency and coin. Money is the circulating medium of exchange as defined by a government. Money is often synonymous with cash, including negotiable instruments such as checks.
Each country has its own money, or currency, that is used as a medium of exchange within that country (some countries share a type of currency, such as the ‘euro’ used by the European Union). The currency of the country can be exchanged for the currency of another via a currency exchange. The current exchange rate determines how much of one currency must be used to purchase a specified amount of the other currency.
Legal tender is a type of payment that can lawfully be used to meet financial obligations. Money, as legal tender, is a commodity or asset, or an officially-issued currency or coin that can be legally exchanged for something of equal value, such as a good or service, or that can be used in payment of the debt.
Currency may include notice of the legal tender status. In the United States, for example, the paper money includes the statement, “This note is legal tender for all debts, public and private” in Australia, the notes include, “This Australian note is legal tender throughout Australia and its territories.”
Money, in and of itself, is nothing. It can be a shell, a metal coin, or a piece of paper with a historic image on it, but the value that people place on it has nothing to do with the physical value of the money. Money derives its value by being a medium of exchange, a unit of measurement and a storehouse for wealth.
Money allows people to trade goods and services indirectly, understand the price of goods and give us a way to save for larger purchases in the future. Money is valuable merely because everyone knows everyone else will accept it as a form of payment.
Money, in some form, has been part of human history for at least 3,000 years. Before that time, it is assumed that a system of bartering was likely used. Bartering is the direct trade of goods and services. Slowly, a type of prehistoric currency involving easily traded goods like animal skins, salt and weapons developed over the centuries.
This system is barter and trade spread across the world, and it still survives today in some parts of the globe. Although Chain was the first country to use recognizable coins, the first minted coin was created not too far away in Lydia (now western Turkey). The coins were made from electrum, a mixture of silver and gold that occurs naturally, and stamped with pictures that acted as denominations.
Unfortunately, minting the first coins was developing a strong trading economy couldn’t protect Lydia from the swords of the Persian army. Just when it looked like Lydia was taking the lead in currency developments, in 600 B.C., the Chinese moved from coins to paper money. By the time Marco Polo visited in 1200 A.D., the emperor had a good handle on both money supply and various denominations. In the place of where the American bills say, “In God We Trust,” the Chinese inscription warned, “All counterfeiters will be decapitated”.
Europeans were still using coins all the way up to 1600, helped along by acquisitions of precious metals from colonies to keep minting more and more cash. Eventually, the banks started using bank notes for depositors and borrowers to carry around instead of coins. These notes could be taken to the bank at any time and exchanged for their face values in silver or gold coins. This paper money could be used to buy goods and operated much like currency today, but it was issued by banks and private institutions, not the government, which is responsible for issuing currency in most countries.
The first paper currency issued by European governments was actually issued by colonial governments in North America. Because shipments between Europe and the colonies took so long, the colonists often ran out of the cash as operations expanded. Instead of going back to a barter system, the colonial governments used IOUs that traded as a currency. The first instance was in Canada, then a French colony. In 1685, soldiers were issued playing cards denominated and signed by the government to use as cash instead of coins from France.
Money is nothing but everything, Basically, money was introduced as an instrument of exchange. Accordingly, money meant anything which served as a medium of exchange. With the passage of time, people started saving in terms of money. Money ‘as a store of value’ also came to be linked with its meaning and definition. Besides, money was recognized as a measure of value. Further, money started serving as a standard of deferred payments.
All the above discussion, we may conclude, Money is a social convention. “We accept money as payment because we expect others to accept it from others.” In brief, money is anything that people will accept in exchange for goods or services, in the belief that they may in turn exchange it, now or later, for other goods or services. Right from birth to date, everybody requires money at every stage of life.
So, anything is money which is used as money and the legally – “anything which the state declares as money is money”.