Bitcoin is Money. Just that it’s better – Creed Capital Crypto News

Investors seek assets to protect and grow their wealth, often choosing investments that retain value, appreciate over time, or generate passive incomes such as interest from bank deposits and bonds or dividends from stocks. This is crucial because inflation continuously erodes the purchasing power of money.

In my previous article, I explored why investors should consider Bitcoin and cryptocurrencies as an asset class. The primary reason is the return on investment—over the past 15 years, no other asset class has delivered Bitcoin‘s astronomical gains.

However, intelligent investors don’t buy stocks simply because others praise them or their prices rise. They analyze financial statements, assess business fundamentals, examine revenues, costs, net income, and profit margins, and use present value discounting to determine worth. The same principle applies when investing in Bitcoin or any cryptocurrency—you should strive to understand this emerging asset class before committing your hard-earned money.

Bitcoin was created in 2008 by an anonymous entity known as Satoshi Nakamoto, based on the paper Bitcoin: A Peer-to-Peer Electronic Cash System. It is a software program running on a decentralized network of computers worldwide. At its core, Bitcoin is just ones and zeros—digital data distributed across the globe. The vision behind it was for Bitcoin to function as money or currency therefore an understanding of money essential before delving into Bitcoin.

The origin of money

Money is the language of transactions.

Money was not decreed by any government or state just like language; rather, it emerged from the human mind to facilitate trade. Unlike other species, humans can coordinate and transact in vast numbers, whereas animals typically operate in small packs of no more than fifty. Our ability to unite for shared, often abstract causes has enabled us to achieve remarkable feats and even overpower physically superior species.

Money is a virtual construct. To understand this, try offering a monkey a million dollars or ten crore rupees for the banana in its hand—it won’t trade. Now offer a human just five dollars or 400 rupees for their banana—they’ll exchange it instantly.

Let us try to logically understand how money came into existence.

If you were the only human on Earth, money would be unnecessary. You would fish, grow food, build shelter, and make clothes yourself—no transactions involved.

Now, imagine two people: Person A, who grows apples, and Person B, who grows oranges. Eventually, A will crave oranges and trade apples for them. If they agree on five apples for five oranges, this is a direct exchange or barter system. However, for this to work, both must want what the other offers—an economic principle known as the double coincidence of wants.

Now, introduce a third person: Person C, a fisherman. If A wants fish but C doesn’t want apples, trade becomes complicated. However, if C wants oranges and B is willing to accept apples, A can trade apples for oranges, then use the oranges to get fish from C. This indirect exchange uses an intermediary (oranges) to facilitate trade, hinting at the necessity of money.

This indirect exchange becomes even more complicated if Person A is a shepherd with only goats. How many goats equal how many fish or oranges? As economies grow and people specialize, barter becomes impractical, necessitating an intermediary to facilitate trade—this intermediary is money.

When you work and produce something, you create value. You then exchange that value for something else of value. To do this efficiently, you need a placeholder for value—this placeholder is money, and anything can serve as money.

The evolution of money

Historically, useful commodities were the first forms of money. Various societies have used different materials:

• Salt: The term salary originates from the Latin salarium, meaning “salt money,” as Roman soldiers were once paid in salt. Valued for food preservation, salt was even called “white gold”. Cities have grown around salt trade.
• Rai Stones: The Yapese used massive stone disks as currency.
• Trinkets: Scandinavians used decorative items for trade.
• Tobacco: In colonial America, particularly in Virginia, tobacco served as currency for taxes, fines, and goods due to its high value.

However, these early forms of money had issues: stones varied in size, tobacco differed by crop, and salt dissolved in water. The lack of homogeneity made trade inconsistent.

To solve this, societies turned to precious metals like silver and gold, leading to the development of coins. Gold, in particular, gained widespread adoption due to its scarcity and resistance to forgery—both essential properties of money.

Functions of money

Money is what money does. It functions as a medium of exchange, store of value, unit of account, basis of credit, and standard for deferred payment—all core functions defined by mainstream economics. To function as good money a commodity needs to have certain properties.

Among financial assets, money is the most liquid. Stability is essential—if its value fluctuates wildly, neither buyers nor sellers will want to use it. A stable currency ensures predictable pricing, making trade practical. Imagine if eggs cost $2 today, $10 tomorrow, and $5 the next day—such volatility would make transactions chaotic.

Essential properties of money

1. Durability

Money must be non-perishable. This is why we don’t store wealth in fish, tomatoes, or bananas—they degrade over time. Precious metals like gold and silver became popular because they endure.

Durability isn’t just physical; it also applies to the institution issuing fiat currency. Paper notes remain valuable as long as the financial system backing them is stable. Currencies like the Papiermark, Rentenmark, and Reichsmark lost value when their issuing authorities collapsed.

2. Homogeneity

For money to be practical, its units must be uniform. Salt, tobacco, and other historical currencies lacked homogeneity—tobacco from different farms varied in quality. Metals like gold and silver replaced them because they are consistent and interchangeable.

3. Divisibility

Money must be easily divisible into smaller units. Cattle once served as money, but dividing a cow for trade isn’t practical. Gold, while valuable, is difficult to divide precisely. Digital and fiat currencies excel in divisibility, allowing for precise transactions.

4. Fungibility

Each unit of money must be interchangeable and indistinguishable from another. This ensures seamless transactions—one $10 bill must hold the same value as another $10 bill regardless of its history.

5. Scarcity

A good store of value must be rare and difficult to forge. Water is more essential than gold, yet it’s abundant and easily produced, making it unsuitable as money. Gold’s scarcity and energy-intensive mining process contribute to its value as a store of wealth.

Scarcity also creates demand, appealing to our innate desire for rarity.

6. Portability

Money should be easy to carry and transfer. A hundred sacks of wheat aren’t practical for trade, whereas coins and paper money fit in a wallet.

For large transactions, portability becomes even more crucial. Moving billions of dollars in cash requires suitcases and transport logistics, making digital money a superior alternative for long-distance transactions.

7. Verifiability

The authenticity of money must be easily verifiable to prevent counterfeiting. While fiat currencies include security features, they still face counterfeit threats. Gold is verifiable worldwide, though it requires expert assessment.

The ongoing evolution of money

The transformation of money is far from over. Fiat paper currency is becoming less relevant in the digital age, paving the way for new, improved forms of money that are faster, cheaper, and more efficient.

Money has evolved from salt to trinkets, stones, tobacco, gold, and fiat currency—and it will continue to adapt to the needs of the future.

In my next article, I’ll explore paper money’s rise and problems and the rise of Bitcoin as a monetary asset.

News summary in the crypto space this week worldwide

Coinbase(Ticker:COIN) is looking to re-enter the Indian market. Coinbase, founded in 2012 by Brian Armstrong and Fred Ehrsam through the Y Combinator startup accelerator, has grown into the largest cryptocurrency exchange in the United States by trading volume. As a publicly traded company, it boasts a market capitalization of approximately $65.67 billion as of February 2025. Read here…

Exchanges play a pivotal role in the growth, adoption, and legitimacy of any asset class. Whether it’s equities, commodities, real estate, or cryptocurrencies, exchanges provide the infrastructure that enables efficient price discovery, liquidity, accessibility, and institutional participation.

GameStop the ultimate meme stock (Ticker:GME) is considering an investment in crypto. Read here…

Binance.US part of Binance the largest crypto exchange in the world is resuming US dollar deposits and withdrawals. Read here…

MicroStrategy or Strategy planning to raise another 2 billion dollar convertible notes to buy bitcoin. Read here…

Investors lose 250 million in Libra meme coin. Argentinean president Javier Milei could be impeached for shilling and promoting Libra in tweet. Read here…

Indian government makes it harder on crypto asset holders with brutal punitive tax and laws. Paradoxically India is still worlds top destination for crypto adoption. Read here…

Bankrupt exchange FTX starts paying creditors but only a fraction of crypto. FTX triggered the massive crypto meltdown in the last cycle. Read here…

Pi token launches to great fanfare and crashes 40% . Read here…

ED seizes crypto worth 1600 crores in BitConnect fraud. Read here…

Nithin Eapen is a technologist and entrepreneur with a deep passion for finance, cryptocurrencies, prediction markets and technology. You can write to him at neapen@gmail.com

Disclaimer – The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein.  The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors.  Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.