Do we really use money???

Old pound coin

Over the past few days we have seen here in the UK that the old pound coin ceases to be legal tender on the 15th of October to be replaced by the new 12 sided coin

New pound coin

People call the coins and notes we use money.. But what is money and what isn't

Dictionary
A current medium of exchange in the form of coins and banknotes; coins and banknotes collectively.

This is what the banks and government want you to believe. Pieces of paper are money.

Not in my view.. They are just a medium of exchange but they are definitely not money

The laws of money

1. Portable. It should be easy to carry around, transport and store.

2. Durable. Gold and silver are virtually indestructible. A gold coin could be melted in a fire or lost at the bottom of the ocean, and the value of the gold could still be recovered.

3. Divisible. Money should be easily divisible into equal units to accommodate a wide range of transactions.

4. Sufficiently rare. Money should be rare enough to not require a large amount to be carried around for normal transactions, yet plentiful enough so that its smallest divisible unit can accommodate very small transactions.

5. Fungible. That is, any one unit of the money should be interchangeable with any other unit. Diamonds, for example, don’t pass the fungibility test since each diamond is unique.

6. Non-essential for consumption. Oil, for example, would not make good money because it is too useful as an energy source and is thus consumed. As the important industrial uses of silver grow, silver may conflict with this requirement. However, due to its history and other desirable monetary properties, silver could function as money in a system of competing currencies.

7. Easily identifiable. Money should be easy to detect and difficult to counterfeit. The US Mint goes through great lengths to make its dollars hard to copy. Gold has unique properties that can be easily identified and tested with simple tests.

8. A store of value. This is perhaps the most important feature of sound money. A functioning economy requires that people are confident that their money will retain its value over time. 2ooo years ago, a one once gold coin could by a nice toga and a pair of sandals. Today, once ounce of gold can buy a nice suit and a pair of shoes. Contrast that with the US dollar, which has lost 96% of its value since the inception of the Federal Reserve Bank in 1914.

source (https://libertyinsight.com/money/)

So lets see if paper notes are money?
Portable - Yes
Durable - No (paper notes rot and the new coins rust)
Divisible - Yes
Sufficiently rare - No (they can print to oblivion)
Fungible - Yes
Non-essential for consumption - Yes
Easily identifiable - Yes
A store of value - No (constantly eaten away by inflation)

How about gold
Portable - Yes
Durable - Yes
Divisible - Yes
Sufficiently rare - Yes
Fungible - Yes
Non-essential for consumption - Yes
Easily identifiable - Yes
A store of value - Yes

As J P Morgan said....
Gold is money and everything else is credit