Bitcoin is not considered a form of currency – Econlib

In a recent post on Econlog dated February 15, 2025, the topic of discussion revolved around Bitcoin and its role as a medium of account and store of value. Contrary to popular belief, the post argued that Bitcoin should not be classified as money despite its increasing popularity and use in various transactions.

One of the key points emphasized in the post is that Bitcoin lacks the essential characteristics of money, such as a unit of account and a widely accepted medium of exchange. While Bitcoin may be used for some transactions, its volatility and limited acceptance in the mainstream market prevent it from serving as a reliable medium of account.

Furthermore, the post highlighted the distinction between Bitcoin’s function as a store of value and its role as money. While Bitcoin has shown potential as a store of value due to its scarcity and decentralized nature, its volatility and speculative nature raise concerns about its long-term stability and suitability as a medium of exchange.

The post also touched upon the idea that Bitcoin’s value is subjective and influenced by market dynamics, rather than intrinsic properties that define traditional forms of money. This subjectivity and fluctuation in value further complicate Bitcoin’s classification as money and raise doubts about its ability to function as a stable and universally accepted medium of exchange.

Moreover, the post delved into the potential risks and drawbacks associated with relying on Bitcoin as a form of money. The lack of regulatory oversight, security concerns, and the threat of cyber attacks pose significant challenges to Bitcoin’s widespread adoption as a reliable medium of exchange.

Overall, the post made a compelling argument against categorizing Bitcoin as money and instead suggested that it should be viewed more as a speculative asset or digital commodity with unique characteristics that differentiate it from traditional forms of currency. While Bitcoin may have its place in the financial landscape as a store of value, its limitations and volatility may hinder its ability to serve as a mainstream medium of exchange.