It seems as if the borders between cryptocurrencies and fiat money become blurrier. Since the use of cryptocurrencies for payments is increasing while at the same time some countries are trying to restrict its use and develop own digital money, it’s unclear if Bitcoin could be considered a new form of money. In this paper, the author will explain the differences between both and try to find an answer to the question if cryptocurrencies can perform like traditional money.
Inhaltsverzeichnis (Table of Contents)
- LIST OF FIGURES
- ABBREVIATIONS
- INTRODUCTION
- WHAT IS MONEY
- WHAT IS BITCOIN
- CAN BITCOIN PERFORM LIKE MONEY?
- CONCLUSION
- REFERENCES
- LIST OF ANNEX
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to analyze the capabilities of cryptocurrencies, particularly Bitcoin, to function as a viable alternative to traditional forms of money. The paper examines the properties of money, explores the nature of Bitcoin and its potential as a means of exchange, store of value, and unit of account, and ultimately aims to answer the question of whether cryptocurrencies can effectively perform like traditional money.
- The definition and properties of money
- The nature and characteristics of Bitcoin
- The potential of Bitcoin as a means of exchange, store of value, and unit of account
- The challenges and hurdles faced by cryptocurrencies in achieving global acceptance
- The relationship between cryptocurrencies and traditional fiat money.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter provides a brief overview of recent developments in the cryptocurrency market, particularly the impact of China's restrictions on cryptocurrency trading and Tesla's decision to stop accepting Bitcoin for payments. The introduction highlights the volatility of Bitcoin and its current struggles to gain widespread acceptance as a payment method.
- What is Money: This chapter explores the traditional definition of money and its three essential functions: means of exchange, store of value, and unit of account. The chapter also discusses different forms of money throughout history, including commodity money, representative money, and fiat money.
Schlüsselwörter (Keywords)
The paper focuses on key concepts such as Bitcoin, cryptocurrency, traditional money, means of exchange, store of value, unit of account, fiat money, central bank digital currency (CBDC), decentralized finance (DeFi), and global acceptance.
Frequently Asked Questions
Can Bitcoin be considered a new form of money?
The paper explores whether Bitcoin fulfills the traditional functions of money: means of exchange, store of value, and unit of account.
What is the difference between Bitcoin and fiat money?
Fiat money is government-issued and regulated by central banks, while Bitcoin is a decentralized cryptocurrency based on blockchain technology without a central authority.
What are the main functions of money analyzed in the paper?
The three essential functions are: 1. Means of exchange, 2. Store of value, and 3. Unit of account.
Why is Bitcoin's volatility a problem for its use as money?
High price fluctuations make it difficult for Bitcoin to serve as a stable store of value or a reliable unit of account for daily transactions.
What is a Central Bank Digital Currency (CBDC)?
A CBDC is a digital form of fiat money issued and regulated by a country's central bank, often developed as a response to the rise of cryptocurrencies.
- Quote paper
- Julian Dressler (Author), 2021, Bitcoins and Blockchain: Can Cryptocurrencies perform like Traditional Money?, Munich, GRIN Verlag, https://www.grin.com/document/1075960
