Bitcoin Basics Part 2
Money is anything that people use to exchange value, make purchases, and store wealth. Over time, societies have used many things as money, like gold, silver, shells, and even livestock. For something to be considered money, it generally needs to have a few key properties: it should be a medium of exchange, meaning people can use it to trade for goods and services; it should be a unit of account, so prices can be measured in it; it should be portable, so it can be easily carried or transferred; it should be durable, so it doesn’t wear out quickly; it should be divisible, so it can be broken into smaller amounts for smaller purchases; and lastly, it should be a store of value, meaning it can hold its worth over time.
When something has these properties, it tends to be adopted as money because it makes trade and saving easier. For example, gold was used for thousands of years because it was durable, portable, and held its value. However, carrying gold around can be difficult, and that’s one of the reasons paper money became popular. Paper money is lightweight, easy to carry, and can be divided into smaller amounts like coins. Over time, society adopted paper money because it was easier to use, and it was backed by governments that guaranteed its value. But when governments print too much money, it can lose value through inflation. This is where Bitcoin steps in as a new kind of money that people are beginning to adopt.
Bitcoin is the best money ever invented because it improves upon many of the weaknesses of traditional money. First, Bitcoin is completely digital, which makes it easy to transfer anywhere in the world with the click of a button. It’s also highly divisible—you can break one Bitcoin into 100 million smaller units called satoshis, making it perfect for both large and tiny transactions. Bitcoin is durable because it’s not a physical object that can wear out, and it’s portable because it exists on the internet. Perhaps most importantly, Bitcoin has a fixed supply—there will only ever be 21 million bitcoins. This scarcity gives Bitcoin an edge as a store of value, something that paper money, which can be printed endlessly, struggles with.
Many people around the world are already using Bitcoin as money in various ways. Some people use Bitcoin to send money across borders quickly and cheaply, avoiding high fees from banks or money transfer services. Others use Bitcoin to buy goods and services from merchants who accept it as payment. In countries with unstable currencies or high inflation, people are turning to Bitcoin to store their savings in a way that keeps their wealth from losing value. Bitcoin is also being used by people who want to invest for the future, hoping that as more people use and value Bitcoin, its price will go up, just like how gold has held its value over centuries.
In conclusion, Bitcoin fits the definition of money because it has all the properties that make something useful as a medium of exchange, a unit of account, and a store of value. It’s durable, portable, divisible, and scarce, which makes it an improvement over traditional forms of money like gold or paper currency. As more people adopt Bitcoin and start using it in their daily lives, it’s becoming clear that Bitcoin is not just an investment, but a revolutionary form of money that could change the way we think about currency forever.
