Economics textbooks use a definition of money as an asset that can be used as a means of payment, that constitutes a unit of account and serves as a store of value. This definition is being used often in debates about new forms of digital money and payments (including cryptocurrencies).
I would like to argue that this characterization of money is
a) not a definition
b) not a very useful one to compare alternative forms of payment
c) fails to understand how digital payments and new technologies have changed the nature of money
Let’s deconstruct the "definition" to see what is wrong with it.
Unit of account and store of value
Prices and wages are denominated in a unit of account that we identify with money or the currency. This one is quite straightforward but we cannot ruleRead More »