The Nature of Money

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1. okintheoryMay 2022
   Actually, the explanations for why bitcoin has value coming from different supporters is quite different, e.g. some argue it is useful as a means of payment, some argue it isn't but it will be, some argue it is only useful as a store of value. If you read "The Nature of Money" by George Ingham, you'll see that many economists think of money as something that is simultaneously: (1) A means of payment (2) a unit of account (3) a store of value. And historically, all successful currencies have been backed by a state that created demand for the currency by taxing people in it. Bitcoin is arguably doing very poorly on (1) and (2), which from a historical perspective makes it prospects look very uncertain.
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2. jonahbentonMar 2022
   The Nature of Money, Geoffrey Ingham, predates Bitcoin and the financial crisis, but it is still the most incisive theoretical discussion of money I've read. If Debt: The First 5000 Years is undergrad, The Nature of Money is grad.
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3. jonahbentonJul 2020
   Lots of valid critique for this piece. Will add that "state money" and "bank money" is a poor way to talk about credit.

   In terms of references, tons and tons and tons of prior art defining money and so forth. A book I recently enjoyed a great deal is:

   The Nature Of Money, Geoffrey Ingham

   https://www.amazon.com/Nature-Money-Geoffrey-Ingham/dp/07456...

   And this more recent Bank of England paper is exceptional:

   https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

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4. jonahbentonMar 2020
   Huge, huge topic. You will have to pick a path through the enormous jungle.

   The starting point I would recommend is bottom up, through accounting and financial statements. Core knowledge, of both practical and intellectual value. Tons of books here, I particularly like

   Thomas Ittelson - Financial Statements

   Accessible, straightforward, friendly.

   After that, any of the collections of

   Warren Buffett's Letters to Shareholders

   are both entertaining and intellectually valuable, and provide great insight. Read forward, eg, from his first letters in the 1960s, to now.

   One of the realizations in the journey is that there are, and have been, a lot of different kinds of money- credit money and exchange money and asset money and so forth. A relatively abstract/intellectual but immensely useful survey is

   The Nature of Money - Geoffrey Ingham

   The concept of an asset is critical to the functioning of the financial system. New kinds of assets are created all the time. One of the best written books I have read recently goes into venture capital and debt asset creation:

   The Code Of Capital - Katharina Pistor

   The role of different kinds of money in history, especially US history, is absolutely fascinating. I am in the middle of

   American Bonds - Sarah Quinn

   and can recommend.

   I do not especially recommend the Dalio books or Graeber's Debt or Ferguson's books. They are fine but I did not find them helping me build understanding. Not quite junk food, but definitely not protein.

   I unfortunately have not found any of the books I have seen about the Federal Reserve to be worthy of recommending. My wife works there and so I have perhaps a unique perspective. But nothing conveys the challenge and the mechanics of what they do. Still looking. The papers the various Fed banks publish, as well as the papers published by the Bank of England, are uniformly outstanding.

   Finally, some of the bitcoin people have written about money. Tho I am a believer in bitcoin I absolutely recommend against most of them, especially Saifedean Ammous's book. Do not read.

   Good luck!

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