Topic: Money as a store of value... - page 6. (Read 822 times)

You were right that paper money has a value, and it can be stored, we cannot argue with that, but the question is, does that amount you put in the bank still the same as the time comes? Let's put it simply this way, $1,000 is already enough in our family to survive whole month or even more, but do you think that figure will be enough in the future? Considering the constant rise of the prices in all the basic needs everyday do you think in the next 5-10 years that amount is significant? I don't think it is. That is the same situation even if you put that amount inside the bank, and guess what? for sure you'll earn percentage depends on how much you deposit by what method? Banks are going to play your money by example lending other people and giving them interest rates as their profit, and the duration? In my country it has minimum of 3 months, so let's just say they can lend it 4 times a year with 2% interest per loan, they have 8% APY just using your money and you get the 2% because that's what the bank promised when you put your money for time deposit. In short, they have 6% profit without lifting a finger and only using words and papers.

That's just a basic breakdown for an individual putting money inside a bank, so how much money does the bank have if all of you guys put your money at the same time? 100% profit isn't impossible to make if we're talking about banks, but that's just them not the individual whose blood and sweat being poured just to make "savings" for their future plans.

I only use money as a payment in my country, nothing more.

I mostly use Bitcoin as a store of value, I don't really care with the current price or during the bear market, because I know in the future Bitcoin will be worth more than what I have spent my money to buy it. When Bitcoin price reach new ATH, I will convert some of my Bitcoin into stable coin. So whenever I need cash, I can just convert my stable coin to fiat.

This is exactly why cash or fiat is NOT money it is actually currency. Very few people know this distinction though. Basically ever since they decided to print fiat unstoppably they turned fiat into currency that can only be used as medium of exchange while it lost its store of value status.

BTW this is why one of the characteristics of bitcoin is to be both a store of value and medium of exchange, or in other words bitcoin is the best candidate to be considered "money" not just a "currency".

    It's true what you said, the barter they did back then was even different, and what they used to barter was often food in exchange for weapons, for example meat, pork, grass that was the result of hunting in the jungle, things like that in those days gold or silver or copper was not known then.

   But because people's minds evolved, little by little they discovered systems of exchange, until they discovered gold, silver and copper added as payment for what they wanted to get apart from bartering and until it came to the point that silver they have formed coins and even copper and gold.

I would not consider cash to be a store of value, seeing how inflation has been behaving these last three years, the United States (country that allegedly has the strongest currency on the planet) has not been able to go back to the 2% of inflation per year, as the FED had been accustomed to.

Perhaps, I would change my mind if the economical policies change in the future to aim for a 0% inflation in the long term or even some years with negative inflation. Which I believe to be very unlikely, to be honest.

Before there was money, in ancient times they still used the barter system, whatever the barter was, it depended on the agreement of both parties. But the barter system cann't be declared a store of value, because it has no future value and only has value in the past. So that currency emerged as a tools of payment, a store of value, and as a medium for pricing an item.

Firstly what is the word store of value;store of value is something that maintain its worth both in the present and the future.Money is a type of assets in an economy that you can use to buy goods and services from other people or businesses.One of the functions of money in an economy is that it's serves as a store of value.
     A store of value is something people use to transfer purchasing power from the present to the future.
     While money is an asset that can store value, and also Gold and silver for example, acts as store of value.
     Since money is accepted as a store of value, trade is much more efficient.When an individual or business accepts money in exchange for a goods and services, the seller can store the money in a bank account and retrieve it later in the future.