At a conference held last week in DC, the European Central Bank presented their opinion of virtual currencies including discussions about bitcoin. On slide 6 of their presentation they made a striking argument: bitcoin does not fulfill any of the three functions of money: Medium of Exchange, Unit of Account, or Store of Value. Most likely, their counterpoints to these three functions relate to the large volatility that bitcoin’s exchange rate has experienced since it’s inception. While it is difficult to refute their exact points since the soundtrack is not included, it does raise an interesting question of how the properties of bitcoin compares to fiat and gold. There are nine distinct characteristics of money: scarce, durable, portable, divisible, easy to recognize, easy to store, fungibile, hard to counterfeit, and widespread use. At first glance, bitcoin has a significant advantage over fiat currencies and gold in many of these, and this will be even more obvious after a further examination. Fiat money – a term used to describe currency that…
The post Refuting the ECB – The 9 Characteristics That Make Bitcoin Money appeared first on The Genesis Block.
At a conference held last week in DC, the European Central Bank presented their opinion of virtual currencies including discussions about bitcoin. On slide 6 of their presentation they made a striking argument: bitcoin does not fulfill any of the three functions of money: Medium of Exchange, Unit of Account, or Store of Value. Most likely, their counterpoints to these three functions relate to the large volatility that bitcoin’s exchange rate has experienced since it’s inception. While it is difficult to refute their exact points since the soundtrack is not included, it does raise an interesting question of how the properties of bitcoin compares to fiat and gold. There are nine distinct characteristics of money: scarce, durable, portable, divisible, easy to recognize, easy to store, fungibile, hard to counterfeit, and widespread use. At first glance, bitcoin has a significant advantage over fiat currencies and gold in many of these, and this will be even more obvious after a further examination. Fiat money – a term used to describe currency that…
The post Refuting the ECB – The 9 Characteristics That Make Bitcoin Money appeared first on The Genesis Block.
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