Categories
Uncategorized

Is Bitcoin Money?

What is money? Money is a measurement unit for the purpose of exchange. Money is used for valuation of goods, settling debts, accounting for work performed, and standardizing the measurement of production. Money has to be divisible, portable, stable in value, easy to obtain, durable over time and must be trusted by all parties using it. Imagine money that is too large to divide into pieces, heavy to carry, spoils after 2 days, gets damaged easily or can be eaten by animals? If these are the characteristics of the currency, it would not be that useful and many business deals would not happen.

The most important element of money is trust. If you work for someone and you are not sure if you will get paid, would you do the work? If you did the work, and you got paid in something that was not accepted in many places, is it a valid payment? The economy and money system is built on trust, and it can be broken by a lack of trust by the majority of people. A run on a bank is a classic example of people losing trust in a bank and it going bankrupt shortly thereafter. Trust is also the pinnacle of trade and business deals.

Leave a Reply

Your email address will not be published. Required fields are marked *