What Money Is
Obligation, records and double entry. What a balance actually is, what a bank actually is, and the difference between clearing and settlement.
The Oldest Question
You will be able to explain why a payment is an edit to a record rather than the movement of an object, using Ada's notebook as the worked example.
8,525 words/37 min read2A Balance Is Not a Thing
You will be able to explain why the number in your banking app is a promise rather than a location, and why the envelope-in-a-drawer picture of a bank is…
7,633 words/33 min read3Double Entry
You will be able to state the rule of double entry in one sentence — never write down one end of a journey — and explain why a record-keeping method that…
8,241 words/36 min read4Ledgers, Journals and Accounts
You will be able to explain why a bank's general ledger contains no account with your name on it, and where your own balance actually lives.
8,211 words/36 min read5What a Bank Is
You will be able to explain why your bank balance is a debt the bank owes you rather than a pile of notes held somewhere with your name on it.
8,357 words/36 min read6Two Kinds of Money
You will be able to explain why a payment between two customers of the same bank needs no cooperation from anybody, while an identical-looking payment to…
7,459 words/32 min read7Clearing Versus Settlement
You will be able to say precisely what clearing is, what settlement is, and why "the payment went through" carries almost no information.
7,928 words/34 min read8Netting
You will be able to explain how about £23 billion of daily Bacs payments is discharged by moving about £5.3 billion between settlement accounts, with…
8,695 words/38 min read9Currency, Decimals and the Money Type
You will be able to explain why ten 10p coins added together as pounds come to 0.9999999999999999, and why a till written to notice exactly £1.00 will…
8,418 words/37 min read10Reading a Statement
You will be able to read a bank statement line by line and say, for each line, which system wrote it, when, on whose authority, and what could still…
8,655 words/38 min read