The history of Currency and Money

True wealth is measured by time and freedom, while money is an instrument used to store economic potential until it is ready to be unleashed. Often, when we mention wealth, we think of it in terms of monetary/currency value. That is not necessarily the truth. Wealth consists of several variables, and money is one of them. Furthermore, in the society of today, when we talk of money, we think of the notes and coins in our wallets, homes and bank accounts. In the context of this article and going forward, this is referred to as fiat currency. Money is defined as a store of value that increases with time, such as precious metals, while currency is designed to lose value with time (rand, euro, dollar, etc.). Table 1 below gives a picture of the similarities and differences between money and currency.

Table 1: Money versus Currency

Money Currency
Medium of exchange Medium of exchange
A unit of account A unit of account
Portable Portable
Durable Durable
Divisible Divisible
Fungible (Interchangeable): A gold coin in my vault is the same as a gold coin in yours Fungible (Interchangeable): A R10 in my wallet is the same as a R10 in yours.
Store of value over long time – (limited supply) No intrinsic value – (can be printed out of nowhere)

As can be seen from Table 1 above, currency can be mistaken for money. However, the last property is probably the most important. Money must be a store of value and maintain its purchasing power over long periods of time.


Brief History (American)

The Federal Reserve Bank was founded in 1913 and with it the dollar was created. Before World War 1, with each note the United States of America (USA) treasury issued, they would say, “There has been deposited, in US treasury, $20 in gold coins payable to the bearer on demand.” This meant that the real money was in the vault and currency was a note they gave you as a claim check. Hence the term the “gold-standard.” Each note issued was backed by reserves of gold coins. Check out the this video for an in-depth history of money:


Why should you care? (any Homo Sapien)

The quality of a society is directly proportional to the quality of its money. Stable money leads to stable prices, which are the backbone of a stable society, while the debasement of a currency leads to the fall of empires. Money must be a fixed unit of measure like grams for mass and metres for length. It shouldn’t change with time. Currencies are a tool used by governments and financial sectors all over the world to leak our time and freedom by stealing our purchasing power. The reason goods and services are more expensive today as opposed to 15 years ago is not that the said goods or services have increased in value, but it is because of inflation. The rand value has dropped thus requiring more rands to secure the same item. This is due to several factors which will not be discussed at this time.

Looking at this, that’s why I am not an avid promoter of saving your economic potential in currency. If we wake up tomorrow and inflation is at 50% for instance, you will be screwed.

The reason for this piece is to understand the fundamental differences between money and currency, in order to make sure that when choosing investment vehicles, we can understand whether they store our economic potential or make us loose value overtime.

Key take-away: Money keeps its economic potential intact and currency loses value overtime.


1. Maloney, M. (2013). Fall Of Empires: Rome vs USA (Hidden Secrets Of Money Ep 9) [Recorded by M. Maloney]. United States of America.

2. Maloney, M. (2013). Money vs Currency – Hidden Secrets Of Money Episode 1 – [Recorded by M. Maloney]. United States of America.


This article was written by Lizah Setsepu

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