Lesson 1: WHAT IS MONEY? WHAT IS BITCOIN?

Money is a medium of exchange that facilitates transactions for goods and services. It serves as a unit of account, a store of value, and a standard of deferred payment. Traditionally, money has taken various forms, including coins, banknotes, and digital currencies. Its primary roles are to simplify trade, provide economic stability, and act as a measure of value within an economy. The trust and acceptance of money by the public and institutions are crucial for its effectiveness.

Bitcoin, introduced in 2009 by an anonymous entity known as Satoshi Nakamoto, is a decentralized digital currency that operates on blockchain technology. Unlike traditional currencies, Bitcoin is not issued or regulated by any central authority, making it immune to government interference or manipulation. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger. Bitcoin aims to provide a peer-to-peer payment system that is secure, transparent, and efficient, thus challenging the conventional notions of money.

The relationship between money and Bitcoin lies in Bitcoin's function as a digital alternative to traditional currencies. While it shares the fundamental characteristics of money—acting as a medium of exchange and a store of value—Bitcoin operates independently of central banks and financial institutions. This decentralization allows for greater financial autonomy and innovation but also introduces volatility and regulatory challenges. As Bitcoin continues to gain acceptance, it raises important questions about the future of money and the evolving landscape of financial systems.