Money vs. Currency: How Are Both Different? (Know here)

My life turned upside down 3 years ago when I learned about the difference between money and currency.

And I’m sure yours will too.


I encourage you to read this post in its entirety and take a moment to consider it.

If you do not yet understand the difference between money and currency, this may be the most life-changing post you will ever read.

The difference between knowing and not knowing this can be so great that it will determine whether you are living a wealthy or mediocre life.

Spoiler: Money and currency are not synonymous and are not the same !!

So let’s get busy:

What is the difference between currency and money

Your true wealth is your time and the value you create in that time.

Money or currency (whatever you want to call it for now) is just a medium that stores the value you create.

I think we agree on that !!

Like you, I have also wondered that the amount of goods that my 10-USD note buys now is much smaller than it used to buy for me 10 years ago.

Does this sound familiar?

But still, people like you and me do not take a break and think about this.

Well, I also understand why that pause moment never comes.

It is because we are all busy in our lives with our work and other duties. And is constantly busy chasing the so-called money (USD, EUR, GBP etc).

And many of you will also argue or believe that money and currency are one and the same.

But it is not!!

To understand the difference, you must first understand some simple terminologies used to examine money or currency. And here they are:

  • Exchange medium-It is widely accepted as a means of exchange
  • Portable – It can be taken with you and exchanged.
  • Durable – It can be used several times without deteriorating.
  • Swivel – Its one device corresponds to another.
  • Divisible – It can be divided into smaller value units.
  • Value store– It should retain its purchasing power

What is currency?

The dollar or euro banknote in your pocket is a currency.

This paper invoice or note has the following characteristics:

  • It is a means of exchange,
  • It is a unit of account as numbers are printed on it as 10 USD or 100 USD banknote
  • It is somewhat durable and portable.
  • It is also divisible and fungible – as the same 10 US dollar bill has the same value whether it is in your or my pocket.
  • But do you think it’s a value store?

NÅÅÅÅÅ !! I do not think.

Governments or central banks or paper currency issuing authorities in your respective country can print as much paper currency as they want, thus diluting the currency supply.

This dilution results in an increased supply of currency and its value or purchasing power decreases. (simple law of supply and demand)

Have you ever wondered why your dozen eggs or a gallon of gasoline costs more than it used to cost 10-20 years back !!

Economically it is called inflation but that is beyond the scope of this discussion now.

But this continuous supply of currency is secretly transferring the purchasing power of dollars / euros into your pocket to the people who actually print, receive and use them first.

And who are these people?

They are the governments and the central banks …

Note: These paper currencies are also called fiat currencies, which are imposed on you due to government mandate.

But history shows that every paper currency has returned to its intrinsic value absolutely ZERO and there is 0% success rate for such paper currencies.

If you do not believe me, here is a picture of US Fed- Federal Reserve which accepts whatever I have said so far.

And besides, they have even published the intrinsic value of their paper-denominated currency notes:

Nominal value Production costs
$ 1 and $ 2 5.6 øre pr. note
5 USD 11.0 øre pr. note
10 USD 11.7 øre pr. note
20 USD 10.8 øre pr. note
50 USD 12.9 cents per note
100 USD 13.2 øre pr. note

What is money?

Whereas money is all that currency is and it is also a store of value.

In short, everything that is money should satisfy these qualities:

  • It must be a means of exchange
  • It must be a unit of account
  • It must be durable
  • It must be portable
  • It must be divisible
  • It must be fungible
  • It should keep its purchasing power for a long time.

And only two things fall into this category and they are gold and silver.

Gold & Silver for thousands of years has retained these properties for money, but until recently, a new digital form of real money has emerged.

It is called Bitcoin.

Bitcoin, if put under the lens of properties by money, qualifies as money. (Of course I know it’s wildly fleeting)

But everything that trades in a free market is supposed to be like that.

Even gold, when traded freely in the 1970s, had volatility levels of 10-90%.

All 3 (Bitcoin, Gold, Silver) cannot be printed by governments.

And since they are limited in quantity, they are obligated to maintain their purchasing power by adjusting their prices over and over again.

So by these standards I think you have understood that everything that is claimed to be money must be a store of value and also retain its purchasing power over long periods of time.

The difference in money and currency

But the irony is that very few people understand this difference.

If you do not believe in me, go out tomorrow and ask your engineer or a banker friend, they will not be able to answer it …

I bet you dare ask your financial advisor and he / she will not know the difference between the two – Money & Currency.

But one thing is for sure:

Currency is simply a tool designed by governments to wash out the value you create. The current form of currency is designed in such a way that it steals your wealth from you.

So paper currencies do not store the value or purchasing power that you create every day, instead they leak back to governments and banks.

  • Have you ever noticed that the things you buy, e.g. real estate or let’s say a dozen eggs, does not change in the nature of things, but why do prices change then?

Well, it’s not things that are changing, but it’s the purchasing power of your paper currency that is changing.

Needless to say,

It buys less and less every year, so it’s your currency that loses its value.

I know you would wonder how it all happened?

Well, it’s a long story about money and currency that I’ll save for another time.

But what it’s all about is:

  • What do you need to do to save yourself wealth or purchasing power?

And this brings us to the last section of this article.

What should you do?

Literally speaking:

This is a corruption of money in itself.

Money in itself is not evil.

Gold and silver repeatedly make an inventory of this admission paper currency created around the world.

And while they face this poor management or misallocation of wealth, gold and silver prices are rising every time in history.

But this time, another asset class that qualifies as money will also rise when such an account occurs during a financial crisis. And this asset is Bitcoin.

If you look back at the history of Bitcoin, the very reason it was created was to free people from fiat paper currency.

And it will be a no-brainer that DOES NOT hold some bitcoins in that case.

So I urge you to pause and understand the fact that the value you create in the form of paper currency like USD or EUR is under constant attack.

And if you do not own any Bitcoin, gold and silver, you are doomed to fail.

So it all adds up to this:

“To truly understand something is to be freed from it. To dedicate oneself to a great cause, take responsibility and achieve self-knowledge is the essence of being human.” says the narrator in a famous documentary called ‘Four Horsemen’.

So if you have understood the myth of money and currency, then I think you will be freed from it !!


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