Before we can even talk crypto, we need to get something straight: what the hell is money? Those colorful bills or numbers in your bank account aren’t valuable on their own—they’re just placeholders for something bigger: the value you create.

Money didn’t always exist. People used to barter—trade one good for another. But what happens when you produce something like pencils? You can’t eat pencils, right? So now you’re stuck wandering around, looking for someone who has rice but also wants pencils. Not exactly convenient.

That’s where money steps in. It’s a tool to simplify things, a stand-in for the value you’ve produced. Instead of finding the perfect bartering partner, you’re handed this universal promise: a note that says, "Hey, you made something valuable. You can exchange this for whatever you need."

The Real Value of Money

Here’s the deal though: money only works because it’s tied to production. If no one’s making anything, money loses value—and fast. That’s where inflation comes in.

Picture this: you work in a pencil factory, making one solid pencil. It’s worth something. Now imagine the government comes along, snaps your pencil in half, and declares each half is now a full pencil. Suddenly, there are twice as many pencils, but they’re worth less. Everyone has pencils, but no one wants them anymore. That’s inflation—more money or goods floating around, but less value behind them.

Tying This to Crypto

This is why people are drawn to crypto. Bitcoin, for example, has a fixed supply. No one can "snap it in half" to make more of it. That built-in scarcity makes it resistant to inflation, which is something traditional currencies can’t always promise.

So, considering all this, how much is btc really worth?

Ready for the next step? Let’s dive into how much 1 #BTC is worth in the next lesson.