The three essential functions of money

Money as a unit of account

Money serves as a unit of account, allowing us to measure the value of goods and services in an economy . It expresses the value of all goods in a common measure, thus simplifying trade . For example, money allows us to compare the value of one good with that of another, which is impossible in a barter economy where one good must be exchanged for another .

Money as a medium of exchange

Before the advent of money , exchanges were based on barter , a system plagued by the double coincidence of wants: each party had to want what the other possessed. Money became a medium of exchange , a means of payment accepted by all, thus facilitating trade and preventing a return to barter . This function of money is fundamental to streamlining transactions in a market economy .

Money as a store of value

Finally, money fulfills the function of a store of value , meaning it retains its value over time . Unlike barter , where exchange must be immediate, money allows people to save and defer payments . This store of value is essential for economic stability and confidence in the monetary system.

History of the use of money and evolution of its forms

The transition from a barter economy to commodity money

To overcome the limitations of barter, certain goods such as salt, livestock, or shells were used as currency . This commodity currency was accepted by all because it had a recognized value and facilitated trade .

The emergence of coins and metallic currency

Over time, coins made of precious metals (gold, silver) appeared. These coins and banknotes represented a major advancement: each coin minted had a value guaranteed by the amount of metal it contained. This form of currency made it possible to standardize transactions , simplify the exchange of goods , and expand large-scale trade.

Fiat currency: trust and regulation

Subsequently, fiat currency became the norm. This consists of coins and banknotes whose value no longer depends on precious metals, but on the confidence of currency users and the guarantee of states. This evolution allowed for the creation of money , facilitating economic development. However, not everything in circulation is money: only currency recognized by the state or a central institution is legal tender.
The end of the gold standard in the 20th century marked the decoupling of currency value from precious metals . Now, currency is a tool of economic policy, based on confidence and central bank . The euro, for example, is a single currency shared by several European countries, which facilitates trade and strengthens the stability of the European currency .

Money printing, inflation and monetary policy

Central banks control the creation of fiat money and the amount of money in circulation through their monetary policy money creation can lead to inflation , meaning a general increase in prices and a loss of purchasing power. This affects money to fulfill its function as a store of value: if money poorly retains its value, the confidence of economic agents erodes. To protect themselves, some investors turn to bonds or other assets.

The digitization of money and scriptural money

With the rise of technology, electronic money has become predominant. This form of money relies on electronic entries in bank , representing the majority of the money in circulation . It allows for payments and transactions without physically handling coins and banknotes . Today, every national or regional currency can exist in electronic form, facilitating the management and speed of exchanges on a global scale.
Thus, money has evolved from a simple commodity used as currency to a complex system, central to economic life, whose stability and reliability are paramount for users of money and modern economies

The appeal of cryptocurrencies in the face of the limitations of traditional forms of money

Cryptocurrencies as a new form of money

Cryptocurrencies are decentralized electronic currencies blockchain technology . They fulfill the various functions of money :

• Unit of account : cryptocurrencies allow the value of goods and services to be measured within their own system.
• Intermediaries in exchanges : they facilitate transactions between users without going through banking intermediaries.
• Store of value : some cryptocurrencies, such as Bitcoin, have a limited quantity, which protects against inflation linked to excessive money printing.

The needs that cryptocurrencies address

Faced with the limitations of fiat currency and the loss of confidence linked to inflation, cryptocurrencies offer:

• A decentralized alternative to a common currency controlled by states.
• Protection against devaluation due to excessive money .
• Increased transparency and security in transactions .
• A means of payment accessible globally without barriers.

Investing in cryptocurrency: our recommendation for beginners

Gemini is a very good entry point for investing

The platform offers:

• Top-tier security, with "cold" storage of the majority of funds
• A dual interface: a simplified application for beginners and ActiveTrader , an advanced platform offering volume-dependent fees and a competitive order book.
• Access to over 60 cryptocurrencies, but also to a rare offering on the market: tokenized shares (Nvidia, Apple, etc.). These products replicate the price of real shares via tokens issued directly on the Gemini platform, allowing them to be bought and traded 24/7 like cryptocurrencies, without going through a traditional stockbroker.
• Strict regulatory compliance, with Gemini being one of the first platforms approved in the United States and holding the European license ( MiCA ).
• Additional services such as staking to generate returns on these cryptocurrencies.

Gemini therefore allows you to invest in both cryptocurrencies and tokenized shares, all within a secure and regulated environment.