Here's some more bad news for Bitcoin fans. Not only is the cryptocurrency proving to be a useless substitute for gold bullion as a hedging tool. (You can read about that in a column here.) But it is also nowhere near making the grade as a substitute for money.
For anything to be money, such as paper or coins, it needs to have three attributes.
First, it needs to be a medium of exchange. People must regularly use whatever you call money to buy and sell things. Bitcoin isn't used tht way.
Second, it needs to be a unit of account. That is to say. You know how much you owe or own by counting up your money. Int he U.S. people use dollars. No one measures their wealth in Bitcoin.
Third, it must be a store of value. That is to say, if you have a dollar in your pocket today, then you can be reasonably sure you'll get the same value spending that dollar tomorrow. That isn't the case with Bitcoin. Its prices are all over the place. Last week alone it lost more than 9% of its value.
If what you use as money, fails at any one of these, then it isn't money.
Bitcoin fails at all of them.
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