Defining 'money' in the digital age
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Quick Take
- Economists generally describe money as a medium of exchange, a unit of account, and a store of value
- In order to perform those functions, money needs to be fungible (interchangeable, like how two five-dollar bills equal one ten) and inimitable (unable to be counterfeited)
- Cryptocurrencies have the key properties of fungibility and inimitability but struggle to perform the functions of money
- As adoption increases, cryptocurrencies will likely stabilize in value and function more regularly as money
The nature of money is a complicated and obtuse subject. In daily life, most people use money without truly considering what it is. Money simply works. Cryptocurrencies, however, offer an unusual and distinctly 21st-century perspective on money. The cryptocurrency world often invokes monetary terms, yet looking at cryptocurrency news reveals that economists, technologists, politicians, and […]
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