You have a spare dinosaur sticker.
Your friend Ali has the football sticker you really want.
You offer your dinosaur. Ali says: "No thanks. I don't like dinosaurs."
What will you do?
Ask around until you get the football sticker.
Phew! Swapping only works when both of you want what the other has. That's rare.
Now imagine everyone at school agrees to use marbles.
Try again, with marbles. Sell to whoever wants your sticker, then buy from whoever has yours.
That's money!
Money is something everyone agrees to take. So you can swap with anyone.
You wash the car, and you get paid.
You keep the money in a jar. Next week, you can spend it on anything.
Money saves your hard work for later.
It is like a battery that stores your time and energy. You charge it when you work, and use it when you need it.
A sandwich costs 4 coins. A pencil costs 1 coin. Money is also a ruler. It measures what things cost.
You have 5 coins. What can you buy?
On the island of Yap, people use giant stone wheels for big deals. The biggest is 3.6 metres wide! Heavy ones stay put, so everyone remembers who owns each one.
One stone fell off a boat and sank to the bottom of the sea. Nobody ever saw it again, but everyone agreed it was still there, so people kept using it! One way to see it: money is a shared memory of who owns what.
Source: Rai stones (Wikipedia)
But here's the thing. Not all money is good money. Some money leaks, like a broken battery. Your saved work buys less.
Which money leaks? Find out in chapter 2.
🧠 What you learned
- Money helps you swap with anyone
- Money saves your hard work for later
- Money measures what things cost
🎯 Question 1 of 11 · Easy
Why was swapping stickers so hard?
What made trading easy in the marbles game?
Money is like a battery because…
Which of these is NOT one of money's three jobs?
A sandwich costs 4 coins and a pencil costs 1 coin. Which job of money is that?
You wash a car and get paid. What does that money hold?
On Yap, how did people know who owned each giant stone?
A stone sank to the bottom of the sea. What happened next?
So what was Yap's money really?
Why does it matter if money keeps its charge?
Cara wanted your dinosaur, but you wanted Ali's football. How did marbles help?
Well done!
You earned a badge: What is money?
Education, not financial advice. Never put in money you can't afford to lose.
👩🏫 Grown-up corner · 1 of 6
The three jobs of money
Economists say money does three jobs. It's a medium of exchange (swap), a store of value (save) and a unit of account (measure). The sticker game is the first job. The jar is the second. The sandwich and pencil prices are the third: money is our ruler for value.
👩🏫 Grown-up corner · 2 of 6
Did money really start with swapping?
Probably not like the sticker game. The idea that money began as swapping goes back to Adam Smith. Anthropologists such as David Graeber argue that swapping happened mostly between strangers, while people who knew each other traded on credit. The sticker game is a thought experiment. It shows why a money that strangers all accept makes trade so much easier.
👩🏫 Grown-up corner · 3 of 6
Who is Michael Saylor?
Michael Saylor is an American businessman and the executive chairman of Strategy Inc., a company that holds a lot of bitcoin. He is a Bitcoin supporter, and this site leans on his ideas, so weigh that. Chapter 10 sets the doubts beside them.
👩🏫 Grown-up corner · 4 of 6
Money is stored energy
Michael Saylor tells the story of human progress as people learning to direct energy: fire, then water power with aqueducts and water wheels, and later electric and atomic power. In his view, money is a society's energy in a form you can store and aim at anything. The better the money, the less of that energy is lost over time.
👩🏫 Grown-up corner · 5 of 6
The top property
You can swap money for almost anything else you could own: land, a house, a business, someone's time. That makes money the easiest property to swap. Savings kept as cash share its weakness. If the money is weak, those savings are weak too.
👩🏫 Grown-up corner · 6 of 6
The perfect money
Michael Saylor argues that the ideal money is a shared record. Everyone can check it, nobody can secretly change it, and it always adds up. Yap's stones are one picture of that: a shared memory of who owns what. Keep it in mind, because it is what Bitcoin sets out to be.