Here is an article purporting to explain what money is. It proceeds to define money by describing one of the actions that it does. Money can be used for many different things – exchanging for goods, investing, gambling, tipping, hoarding etc. But defining something by what it does can be misleading, because it reverses cause and effect. Something is what it is (definition), and then, because of what it is, it can do what it does.
It is because Gold is a store of stable value over time, that it came to be used in the exchange of goods (medium of exchange). Many, many things have been used as media of exchange, but that does not make them money. Fiat’s value is generally stable enough to make it a good medium of exchange – over the short term. What stops it from being money is that it fails to store that value stably over the long term.
Many items store value reasonably well for extended periods, but only Gold stores it reliably over all time and in all locations. That is why Gold has been, is, and will always be, the one and only money.
But the definition of money is not ‘Gold’. That is too imprecise to act as a definition. A Gold nugget picked out of a stream is not yet money.
Gold’s stability of value underpins its utility in its primary role in hoards, and in its secondary role in the marketplace. But in both those instances, it is imperative to know – how much value?
It is this insight that leads to the correct and precise definition of money.
Money (noun) – a known weight and fineness (purity) of Gold
That is what money is.