Hello,
I want to write in your own words about
What are the three functions of money? Can something be considered money if it does not fulfill all three functions? Would you consider Bitcoin money?
An extremely good one-paragraph would be a minimum of eight full lines. Do not use any outside resources. I have uploaded the PowerPoint slides as resources for you to use.
Also, I want you to write a short response to two posts.
First,
The three basic functions of money are a medium of exchange, a unit of account, and a store of value. Money serves as a medium of exchange because it is convenient. Money also serves as a unit of account because it facilitates comparison among different things, such as other commodities, currencies, and products like houses and cars. Yes, something can be considered money if it does not fulfill all three functions of money. If a good or service is accepted as value and used as a medium of exchange but then used as a store of value by checking accounts and credit cards, then it may be called money. I would consider Bitcoin as money because it has been used as a store of value in the cryptocurrency world.
Second,
One of the money’s primary roles is as a medium of exchange for buying and selling. Without money, all purchases might have to be handled via barter. When using a barter system, it might be challenging to get what you need since you need to have something the provider also wants. To put it simply, money solves the issue of the double synchronicity of desires since it is a means of trade that may be used in any exchange between any two people, irrespective of whether they need or desire the products or services.
Secondly, money must be a reliable store of value in sequence to function as a medium of trade. If money could not be saved for later use and still be worth exchanging, it wouldn’t be used as a medium of work since it wouldn’t address the double concurrence of desires issue. Finally, since it is universally recognized as a trade means, cash is much more liquid than other reservoirs of value. On top of all that, money is a portable kind of value storage that comes in many practical denominations.
Third, money serves as a unit of account since it is used to quantify values in transactions. The seller and buyer may make more informed judgments regarding the quantity of an item to be sold or purchased if they know its monetary worth. In the longer term, nothing can be considered money if it does not entirely fulfill the core functions mentioned above. Based on this criterion, I would not consider Bitcoin as money yet. Because more and more places will use Bitcoin as payment, it may meet the first condition. However, it is not a reliable unit of account or means of storing wealth. Because of its tremendous volatility, Bitcoin is not practical for usage in these settings. There are other features of currencies that Bitcoin lacks. Since you can’t put it in the bank, users must keep it in “digital wallets,” which have become hackers’ targets. Customers of financial institutions rely on bank deposits, and no other system comes close. Bitcoins are not yet used as an accounting unit by any creditors for credit cards, consumer lending, or mortgages, and there are no bitcoin-denominated credit or debit cards.
