The aim was to develop a form of money free from inflation, not regulated by the government like other currencies, and one with low transaction costs to favor everybody.
Bitcoin is a digital currency that uses blockchain technology while recording all transactions on a public ledger. After spending your Bitcoin, you cannot use it again because miners verify all the transactions through the mining process.
They solve mathematical equations before entering transaction details on the public ledger.
After the introduction of Bitcoin, the price was less than a dollar but later moved to a high value of $68,000 within two decades.
Although the current Bitcoin value has dropped to $20,000, it is way more than other stores of value and traditional forms of currency.
Since the introduction of Bitcoin, there has been a buzz about whether it is a real currency or speculation and whether people should trust it.
Some investors entered the crypto world and made huge investments, while others watched it closely, waiting for its downfall.
Bitcoin could be the future of currency, but the question among most speculators is whether it meets the three functions of money. The three functions of money are that it is a store of value, a medium of exchange, and a unit of account.
Bitcoin As A Medium Of Exchange
Bitcoin already functions as a medium of exchange worldwide. Bitcoin appeared as the first online currency and succeeded in a harsh legal environment as a legal medium of exchange.
Some argue that Bitcoin has failed as a medium of exchange in some nations. However, there are improvements in the network, making Bitcoin a more viable medium of exchange.
Currently, big companies like Microsoft and Burger King allow payments through Bitcoin. And this shows that they accept it as a form of value exchange, as you can purchase a product and pay with Bitcoin.
Although only some places in the world allow Bitcoin usage, it still shows progress in using Bitcoin as a medium of exchange. Generally, adopting Bitcoin as a medium of exchange means it meets this function of money.
Bitcoin As A Store Of Value
Money is a store of value, and depending on the type of currency and amount you have, that's how you measure the value you hold. In the same way, Bitcoin is a valuable form of money since it stores some value.
One Bitcoin is worth $20,000 more than other stores of value. Like other stores of value used in trading activities, you can also trade Bitcoin.
There are trading Bitcoin 360 ai that can help you purchase and sell this store of value for profits. Bitcoin is a store of value because it is a finished product. Just like money fluctuates in value, the same happens with Bitcoin.
Money is a unit of account. In the same way, Satoshi created Bitcoin with the intention and idea of serving as a unit of account. An accounting unit refers to the monetary measure of value in which somebody can state values.
Whether Bitcoin meets this characteristic comes with much debate. The debate and controversy are that you cannot go to a grocery store and price a commodity in Bitcoins as you can with conventional money.
Nevertheless, some businesses allow buyers to pay with Bitcoin, where they convert the currency into Bitcoins and pay according to the amount that equals the value of Bitcoin at that moment.
Although Bitcoin might not entirely fit into the same shoes as money, Bitcoin still serves as currency. The only lacking thing is that it is widespread acceptance in all jurisdictions.
However, with more adoption of Bitcoin as a mode of payment, it might adequately meet the functions of money in the future.
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