payment - Definition of Money Everybody needs money. That's...

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Definition of Money “Everybody needs money. That's why they call it money Danny Devito in “Heist” “a measure of value, a medium of exchange” 1
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Definition of Money something generally accepted by all members of the society as a medium of exchange, a measure of value, or a means of payment 2
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Desired Properties of Money Universal acceptance Transferability, portability Safety (unforgeable, unstealable) Privacy (no one except parties know the amount) Anonymity (no one can identify the payor) Work off-line (no need for on-line verification) Divisible into change (pay for $10 item with $100 bill) Arbitrary denominations (e.g. $325.14) 3
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History of Money Barter (direct exchange of goods) Medium of exchange (arrowheads, salt) Coins (gold, silver) Tokens (paper) Notational money (bank accounts) Dematerialized schemes (pure information) 4 ABSTRACTION NEED BANKS More on history of money: http://en.wikipedia.org/wiki/History_of_money
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Types of Money: Fiduciary ( government) vs. Scriptural ( issuer- based) Fiduciary money (fiat money, legal tender) Issued by a central (government) bank Has real “discharging power” (to discharge debts) Cannot be refused Scriptural money (not legal tender) Money not issued by a central bank Examples: bank accounts, travelers cheques, gift certificates, Octopus Discharging power based on trust in issuer Can be refused 5
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Types of Money (what form does it take?) : Token
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payment - Definition of Money Everybody needs money. That's...

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