What is money?
Money is a measurement device for the market. Money is used for the evaluation of products, settling trades, accounting for work performed, and standardizing the measurement of production. Money needs to be divisible, mobile, stable in value, simple to obtain, lasting over time, and trusted by all parties utilizing it. Imagine the money that’s too large to split into pieces, heavy to carry, spoils after two days, gets damaged easily. If these are the money’s characteristics, it wouldn’t be that helpful, and many business deals wouldn’t happen.
The essential element of cash is trust.
Should you work for someone and you’re not positive whether you will get paid, would you do the work? In case you did the job, and you have paid in something that wasn’t approved in many areas, bitcoin price can be a valid payment? The market and money system are built on hope, and it may be broken by a lack of trust by nearly all people. A run on a lender is a classic case of people losing faith in a financial institution and going bankrupt soon after that. Trust is also the pinnacle of commerce and business deals. If you do not feel the person, you’re doing a market with is trusted, the bargain would not be initiated. bitcoin price Privacy is an element of trust. If each deal you created were broadcasted in the public realm, a portion of faith would be lost. Someone can undercut (steal) your business bargain or rob you of the profits after the deal is finished. The ideal security is achieved through privacy.
In the case of bitcoin, does it function as money?
It’s portable, easily obtainable, may be used to value assets and settle debts. Is your value steady? Since the price of Bitcoin moves around a lot versus other currencies, the solution is probably no. If you’re attempting to purchase a basket of apples and pay for them in Bitcoin, these apples may double in bitcoin price in a week, then go down 30% the next week, and then double in price shortly after that. If each transaction were this volatile, you would be unable to purchase many products and know just how much you can invest. The same thing would occur with business deals.