This is a question many have asked me - what makes bitcoin money. I tell them, the same thing that makes money money is the same that makes bitcoin money.
Firstly though, it’s important for us to know the definition of money.
It is described on Wikipedia that Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The online encyclopedia also makes us understand that the main functions of money are distinguished as: a medium of exchange; a unit of account; and a store of value.
Money’s main function is that it serves as a medium of exchange. That’s the reason you can stretch your hand with a coloured paper or card made out plastic in it to the guy who sells laptop and he won’t try punching you in the face. Money though, can be anything. So far it can serve as a medium of exchange. Money can be your gold or your wisdom. It can be your house or your dog. It can be your maize or your cap. Money is what you say money is. If it is needed or wanted, then it is money. If it is scarce and not littered everywhere, then it is money.
Now, Bitcoin as a new kind of currency may have been invented some years ago but what it fulfills is no different to what the barter-like-method was doing many centuries ago. It is doing the same thing cowry shells were doing thousands of years ago.
Money like we stated earlier, according to modern economics has three functions - a medium of exchange; a unit of account; a store of value. We already have established fact that the bitcoin technology can be used as a medium of exchange. Bitcoin can be used to buy pizza, electronics, jewelries, video games, game tickets, flight tickets etc.
Who accepts bitcoins?
Big organizations like Microsoft, WordPress, Dell, Overstock, AirBaltic, Sacramento Kings and many more accept the currency.
For bitcoin to function as a medium of exchange, it automatically functions as a unit of account. A unit of account is something that can be used to value goods and services settle debts and make calculations. The pizza is valued and purchased using bitcoin.
Now the third - store of value is the function of an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. The bitcoin can be saved in your bitcoin wallet (https://jostpay.com), retrieved and exchanged at a later time.
So you see, what makes money, money; is what makes bitcoin money.
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