Is Bitcoin actual money?

Money is any recognized means of payment, while currency is a legal tender.[1] In this context, foreign exchange is any currency from another country. It is a foreign claim in the form of another currency. Bitcoin could be money that is not issued by any government.

In order for us to decide whether Bitcoin is actually money, we need to examine whether Bitcoins fulfill the money functions.

Money has a value preservation function. We may trust that the same amount of money will still have approximately the same price value over a period of a few years. It allows us to buy the same amount of goods with the same amount of money. Compliance with the value maintenance function can be measured by the price value index. It can be determined from the basket of goods. This is a "symbolic basket" comprising the 250 most important consumer goods that a German needs to live. While with fiat money the money supply can be increased at will by the state, this is not the case with Bitcoin. It is limited in quantity to 21 million units[2]. With conventional money, it is possible to adjust the money supply to the quantity of goods and thus keep prices approximately constant[3]. This is not possible with Bitcoin. Here, a rising goods equivalent value can be assumed over a longer investment period, provided that the quantity of goods increases.??

Money has a second important property, the value transfer function1. Money is worth nothing as long as you cannot buy anything with it. For a long time, this was also an interesting question in the digital currency market. "What can I actually buy with the Bitcoins I have?"

Bitcoins can be purchased or exchanged if they comply with money laundering guidelines, i.e. the Act on the Tracing of Profits from Serious Crimes (Money Laundering Act - AMLA) and in particular the know-your-customer provisions. This can be done via the exchanges, e.g. Bittrex, Poloniex and Bitfinex. However, it is not true that there is no way to buy Bitcoins outside of the Internet.[4] Ultimately, Bitcoin remains the only crypto payment method currently available. Bitcoin already has millions of acceptance points.

Another function of money is the criterion of value measurement or unit of account[5].

Money must be able to be measured in numbers. One Bitcoin can be divided into a maximum of 108 units of account. If the exchange rate were to rise further, certain goods would no longer be quantifiable with Bitcoins. However, this restriction also exists with conventional currencies. With Bitcoins, other crypto coins can be used for smaller amounts.

This proves that Bitcoin fulfills the monetary functions for money.

Sources:

[1]?Vogel, Marion, Relevanz und Risiken von virtuellen W?hrungen anhand des Beispiel von Bitcoin, S.109??aus https://opus4.kobv.de/opus4-hof/frontdoor/index/index/docId/69

[2]?https://coinmarketcap.com/currencies/bitcoin/

[3]?Sixt E. (2017) Monetarismus, Geldmenge und Politik. In: Bitcoins und andere dezentrale Transaktionssysteme. Springer Gabler, Wiesbaden, S. 147

[4]?MMR 2014, 75

[5] Vogel, Marion, Relevanz und Risiken von virtuellen W?hrungen anhand des Beispiel von Bitcoin, S.109??aus https://opus4.kobv.de/opus4-hof/frontdoor/index/index/docId/69

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