“The root of all our economic suffering lies in misunderstanding what money is.”
Money is one of the few inventions that touches every single human life daily, yet remains misunderstood by the majority. We earn it, spend it, save it—and worry about it. But how often do we stop to ask, what is money, really?
Why does it lose value over time? Why do governments “print more” during crises? Why do some countries experience hyperinflation while others seem stable? To truly understand Bitcoin, Lightning, and the future of finance, we need to go back—not just decades, but millennia.
This article is the first in a 10-part series exploring Bitcoin as more than an investment. It’s a story about truth, control, power, and ultimately: freedom. Let’s start at the very beginning.
🪙 The Core Functions of Money
At its essence, money is a social contract—a tool that allows strangers to trade, cooperate, and build civilizations. It performs three core functions:
- Store of Value – Allows wealth to be preserved over time
- Medium of Exchange – Facilitates transactions without bartering
- Unit of Account – Provides a standard measure for pricing and value comparison
When money fails at these roles, society unravels. Economies contract. Trust erodes.
But money isn’t just physical. It’s conceptual—backed by collective belief. That belief can be strong, or it can be broken. Let’s see how that belief has evolved.
📜 The Evolution of Money
The journey of money is the journey of human cooperation. Here’s a simplified timeline:
| Era | Money Type | Description |
|---|---|---|
| Prehistoric | Barter, Livestock | Required mutual need; inefficient |
| Ancient | Cowry Shells, Metal Beads | Portable, but hard to standardize |
| Classical | Gold, Silver | Scarce, durable, widely accepted |
| Medieval | Coinage | Standardized units; government minted |
| Early Modern | Gold-backed Notes | Redeemable for metal; started central banks |
| Modern | Fiat Currency | No intrinsic value; trust in authority required |
| Digital Age | Bitcoin, Crypto Assets | Algorithmic scarcity; decentralized verification |
The inflection point came in 1971, when the U.S. ended the convertibility of dollars to gold. This act disconnected modern money from anything tangible. From that moment, fiat currency became based entirely on trust—and nothing else.
💸 The Fiat Flaw: Designed to Decay
Fiat currencies are issued by governments and enforced through legal tender laws. They’re convenient. But they come with a fatal design flaw: they can be created endlessly.
- Central banks manipulate supply and interest rates for political reasons
- Governments run deficits and finance them by issuing more currency
- The value of your savings erodes over time, quietly and continuously
Hyperinflation is the extreme outcome, but slow erosion is far more common. Malaysia’s ringgit, for example, has lost over 50% of its value against the U.S. dollar in just 10 years.
Inflation is not just an economic phenomenon. It’s a silent tax—one that punishes savers and rewards debt.
So what makes a currency good? Let’s compare.
🧪 Properties of Good Money
Throughout history, successful forms of money have shared key traits:
| Property | Why It Matters | Fiat | Gold | Bitcoin |
|---|---|---|---|---|
| Scarcity | Prevents dilution | ❌ | ✅ | ✅ |
| Durability | Long-term storage | ✅ | ✅ | ✅ |
| Portability | Easy to transfer | ✅ | ❌ | ✅ |
| Divisibility | Useful for small/large payments | ✅ | ✅ | ✅ |
| Fungibility | All units are the same | ✅ | ✅ | ✅ |
| Verifiability | Easy to confirm authenticity | ✅ | ✅ | ✅ |
| Censorship Resistance | Prevents external control | ❌ | ✅ | ✅ |
Fiat money only excels when paired with institutional power. Remove that trust, and it crumbles. Bitcoin, in contrast, inherits many of gold’s best features—then optimizes them for the digital age.
🧠 Sovereignty & Control
Most people today don’t realize: they don’t own their money.
- Banks can freeze accounts
- Governments can inflate supply
- Payment networks can block transactions
Ownership in the fiat world is conditional. That’s not freedom—it’s custodianship. True monetary sovereignty means:
- You hold your keys (self-custody)
- Your money can’t be diluted
- No authority can censor your transactions
Bitcoin is the first widely adopted technology to offer these freedoms by design. It doesn’t just ask for trust—it eliminates the need for it.
🟠 Bitcoin: Ancient Truths in Digital Form
Bitcoin isn’t merely digital cash. It’s a monetary system built from first principles:
- Fixed Supply – Only 21 million BTC will ever exist
- Permissionless – No KYC, no gatekeepers, no ID
- Censorship-resistant – Transactions cannot be stopped or reversed
- Decentralized – No single party controls it
- Predictable Issuance – New coins are minted on a transparent schedule
Bitcoin is not a company. It’s not a stock. It’s a public good. A protocol. A revolution.
Satoshi’s innovation was not just technical, but philosophical. Bitcoin answers the age-old question: What if money belonged to no one—and everyone?
⚡️ Lightning: Scaling the Freedom
One critique of Bitcoin is its limited transaction throughput. That’s where the Lightning Network comes in.
Lightning is a second-layer payment system built on top of Bitcoin. It enables:
- Instant, low-cost payments
- Microtransactions (even one satoshi!)
- Privacy-enhanced transactions
It turns Bitcoin into a global, always-on monetary network—accessible by anyone with a smartphone.
🌏 Why This Matters in Malaysia
Malaysia hasn’t experienced hyperinflation—but we’re not immune:
- The Ringgit has fallen dramatically vs major currencies
- Interest rates are artificially low
- Property and gold are increasingly inaccessible to the young
- Cash savings lose value every year
Young Malaysians are struggling with stagnating wages, rising costs, and broken financial promises. Bitcoin isn’t just an asset class. It’s an exit. A parallel system. A chance to build wealth without permission.
It’s not about speculation. It’s about survival. About sovereignty.
🔍 Beyond Price: Bitcoin as Philosophy
To many, Bitcoin looks volatile. Risky. Speculative.
But viewed over decades, it’s the most consistent form of value preservation humanity has discovered in the digital era. More importantly, it’s incorruptible. No CEO. No bailout. No inflationary pressure.
Bitcoin invites us to ask deeper questions:
- What happens when money can’t be printed?
- What kind of world does that create?
- What happens when citizens can opt out of fiat games?
Bitcoin is not just money. It’s a peaceful revolution—powered by math and maintained by anyone who runs a node.
🛤️ What’s Next?
This article is just the beginning. In the next chapter, we’ll explore:
- Why Bitcoin was inevitable
- The 2008 financial crisis that birthed it
- And why central banks will never voluntarily give up power
If this article resonated with you, share it with someone who needs to understand money better. And if you’d like to support independent writing and Bitcoin education:
- Send some sats via Lightning ⚡️
- Visit kheai.com to learn more about Bitcoin-native tools in Malaysia
kheAI is a minimalist startup focused on freedom, sovereignty, and Lightning-powered apps for the Malaysian context. We believe in Bitcoin as a tool for individual autonomy.
Stay sovereign. Stay curious.
– Kai