What is money? | Nerds on Money

People are obsessed with money. But what is money, exactly? How do we decide on its value? How does it work?

As TVO Today affordability reporter Kat Eschner tells us in this TVO Today explainer, money is whatever we agree money is. It can be coins, or bills, digital, or even rocks.

Kat explains that the current money supply that drives the global economy comes from central banks in each country, such as the Bank of Canada. This money is known as “fiat currency.” But in recent years, cryptocurrency, digital forms of money such as Bitcoin that are not regulated by central banks, have emerged. Not everyone agrees that cryptocurrencies are money, but enough people agree that they are money that they are used to buy and sell things.

Money and currency is, in a sense, a collective hallucination. But as Kat explains, it’s a collective hallucination individuals have little ability to control or change.

This video is a good primer for anyone interested in the economy, fiat currency versus cryptocurrency, and the role of central banks in the global monetary system.
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