Bitcoin as Money: A Beginner Level Look into What Money Really Is

Recently, some friends got together to discuss crypto and its viability. On one side, there were many positive feelings towards crypto and its role in the future. On the other side, the belief was that Bitcoin and other crypto is a scam, it is fake, and not worth investing in. However, what still needs to be examined is whether or not Bitcoin is real money.

What Is Money

Let us look at three aspects, which define whether an asset is or is not money. First, any real money has to be used as a medium of exchange. For something to be a medium of exchange it has to be an asset, which the holder believes, has value and the one receiving it also believes this. This is how coins have a value assigned to them, which everyone in society agrees. This makes them a medium of exchange.

Any real money needs a unit of account. A unit of account means the number of assets required to make an exchange, one can tell the quantity or quality of items that assets have been exchanged for. As a result, they can make a judgment that is based on the exchange rate.

Any real money needs to be a store of value. This simply means that if you have a given amount of assets, you should be able to go back and retrieve the asset at a different point. When you do this, the asset should still have value. Value does not spoil, rot, or lose relevance with the passing of time.

Does Bitcoin Qualify to Be Money?

First Bitcoin can and has been used to make purchases in the modern world. People use Bitcoin in making purchases, which mainly occurs online today. People are able to buy flights, Amazon goods, hotels, and much more.

Secondly, Bitcoin is a unit of account. This is because different amounts of Bitcoin will get you different quantities or qualities of services and goods. This all depends on the amount of Bitcoin you are willing to give out to get the service. This is no different from giving out fiat currency to get a good or service. It will allow you to estimate the quantity or quality depending on the Bitcoin that is asked for by the one giving out the good or service. As a result, this makes Bitcoin a unit of account.

Thirdly, Bitcoin is a store of value. This is because if you wanted to use Bitcoin to pay your tuition fee for college, and you buy some now, you expect the value to still be there in future. This will make it possible for you to pay for college whether the value has increased or stayed about the same in future.

Summary

So is Bitcoin really money or just an asset? From the study above, Bitcoin has all the three qualifiers of money. Thus, there is no doubt that Bitcoin is money. It acts and can be used in the same way as fiat currency.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Avatar
Bitcoin Exchange Guide News Team
B.E.G. Editorial Team is a gracious group of giving cryptocurrency advocates and blockchain believers who want to ensure we do our part in spreading digital currency awareness and adoption. We are a team of over forty individuals all working as a collective whole to produce around the clock daily news, reviews and insights regarding all major coin updates, token announcements and new releases. Make sure to read our editorial policies and follow us on Twitter, Join us in Telegram. Stay tuned. #bitcoin

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,471FansLike
2,795FollowersFollow
4,195FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Kraken Exchange Onboards Swiss Bank InCore to Help Euro Clients Buy Crypto With Fiat

Swiss Bank InCore has just become the first banking institution in the nation to provide banking services to Kraken crypto exchange. The deal, which was...

Bank Of Japan (BoJ) Launches ‘Technical' Study to Experimenting CBDCs

The race to launch a sovereign digital currency is heating up as Japan became the latest country to venture into a central bank digital...

This Top Coin, Being the Worst Performer of 2020, Is A Disappointment to the Crypto Market

The fourth-largest cryptocurrency by market cap is currently trading at $0.176 in green by 1.66%, like the majority of the market. With 8.61% losses In...

Cryptocurrency Payment Processor BitPay Finally Announces Support for SegWit

Bitpay, the crypto payment processing giant, has finally integrated the segregated witness (SegWit) protocol, a second layer scalable solution to make bitcoin processing cheaper....

Crypto Hardware Wallet Ledger: ‘Funds are Safe' After ‘BigSpender' Vulnerability Found

A vulnerability was recently discovered by ZenGo in popular cryptocurrency wallets Ledger, Edge, and BRD. Named BigSpender, the vulnerability could lead to a double-spend...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today