The explanations are driven by the field people come from. This is the explanation from a macroeconomist through the lens of money creation and policy - Dirk Bezemer: Debt a Great Invention (first episode). I like this for its simplicity.
Those, who are interested in complex systems, like myself, may highlight its principle characteristic as universal system: solid enough to be stored (storage for value) liquid enough for transformations (media for economic transactions). The money is also a numeraire.
Universal systems are programmable. The money system is programmable, but programming constructs are still low level?!
There are options built in physical money, but even more, I agree with Aaron Brown that derivative money was an important addition.
Buying a hotel night at the hotel is different from buying an option for a hotel night at "booking". It is an option, if cancellation is unconstrained (it has an option price).
Cryptocurrencies may support such derivative transactions, but the understanding of the derivative nature needs deeper insight. For quant finance thinkers this is "mother milk".
But what I find interesting: we all have our individual valuation of money. Based on stories, we tell ourselves about it? How we've got it? How we use it? What does this tell about us?
So as on a macro level there is debt before money, on the personal level there are stories before money.
The Fench-Swiss film director Jean-Luc Godard said once
It does not matter where it comes from it matters where it goes toand he meant creative ideas, innovation, … advocating the open innovation system of arts.
As a company this its true for investments - the Modigliani Miller theorem states (simplified): if you finance them by raising stock or selling debt does not matter (intuitive, because you always sell future business).
Where it goes to?
We at UnRisk reinvest margins dominantly in development. We do barely invest in existing assets (not at all in prestigious goods) … The simple story behind this: we like independence (no UnRisk is not for you), doing exciting things, disrupt and reinvent ourselves, …….
If we changed the story the money would change too.
This post is inspired by this post in Seth Godin's Blog. Thinking about money is red-blooded - it drives our business principle for years.
