<p>Today, due to relative low acceptance rate, it doesn't fulfill it's role as a medium of exchange anywhere near potential. Instead the largest amount of transactions is, as with regular money, people speculating on it's future value.</p>

<p>It's important to look not at what it's meant to be, not at what it is, but how it works out for people. Occam's razor applies rigorously, the way something works is how it works for you. Don't complicate it.</p>

<p>In the near future it can be used interchangeably with any currency. The question of whether or not it is one is therefore irrelevant. It will be the only currency-like to be safe, certain, quick and cheap all at once. Let's not argue syntax, let's argue semantics.</p>

CC BY-SA 3.0
2012-01-21T14:50:15.977Z
2012-01-21T14:50:15.977Z
Lodewijk
<blockquote>
  <p>When I use bitcoin as a medium of exchange I have to be confident that the bitcoins will not change in value between the point I receive them and the point I spend them.</p>
</blockquote>

<p>Not really. Most methods of money exchange or transfer bear some costs or risks. Credit cards, for example, require fees (which are paid by the vendor of a good). If the price flictuation of bitcoin which happens during a transaction is small enough that it is more economical to use them than, than to ise other means, they are cheaper. </p>

<p>The duration of a transaction - that is, the time span between a buyer sending an amount and the vecdor beoing able to re-send that to an online monex exchanging services which pays that to his bank account - is around one hour. As credit card fees and costs are easily in the range of 5 % of a traded price, any volatilty which is less than that would still result in more economical transactions. However, quick changes om price are harder to handle - it is far more comfortable if the buyer can acquire his coins a few weeks in advance and the seller has several weeks of time. This a lower volatility is more comfortable for that.</p>

CC BY-SA 3.0
2012-01-14T20:53:54.127Z
2012-01-14T20:53:54.127Z
Zafolo
<p>To be useful as a medium of exchange it must be a useful store of value.</p>

<p>When I use bitcoin as a medium of exchange I have to be confident that the bitcoins will not change in value between the point I receive them and the point I spend them.</p>

CC BY-SA 3.0
2012-01-15T05:09:04.883Z
This is not at all true for many important cases, which are short-term transactions.  E.g. the classic case would be a transfer into bitcoins in one country, followed by an international bitcoin exchange and an immediate transfer out into a different local currency by the receiving party.  That doesn't require much faith in stability of the medium of exchange.
nealmcb
CC BY-SA 3.0
2011-08-31T15:49:23.860Z
2011-08-31T15:49:23.860Z
Peter
<p>It was meant to be used as a semi-anonymous currency.  Some people are using it as that, but a lot of people are using it as a store of value.</p>

CC BY-SA 3.0
2011-08-31T05:33:01.543Z
2011-08-31T05:33:01.543Z
tysat
<p>Today, it primarily serves as a store of value. It is inherently more useful as a medium of exchange, its intended purpose. Perhaps a bit ironically, its expected future usefulness as a medium of exchange is what is driving its present usefulness as a store of value. The thinking is that if you get them now when they're cheap, in the future when they're used as a medium of exchange (and thus there's much more demand) they'll be worth more.</p>

CC BY-SA 3.0
2011-08-31T10:29:13.573Z
2011-08-31T11:08:05.680Z
2011-08-31T11:08:05.680Z
David Schwartz
<p><a href="http://en.wikipedia.org/wiki/Money">Money</a> is often seen as having various functions, such as "<a href="http://en.wikipedia.org/wiki/Medium_of_exchange">medium of exchange</a>" (something useful for conducting transactions, and "<a href="http://en.wikipedia.org/wiki/Store_of_value">store of value</a>" (something valuable as an investment).</p>

<p>Was bitcoin designed to provide both functions, or just one?  How does it mainly function today?</p>

<currencies><bitcoin-economy><money>
Does the bitcoin design make bitcoins suitable as a medium of exchange, a store of value, or both?
nealmcb
# Does the bitcoin design make bitcoins suitable as a medium of exchange, a store of value, or both?

(Asked by: username_0 on 2011-08-31)

[Money](http://en.wikipedia.org/wiki/Money) is often seen as having various functions, such as "[medium of exchange](http://en.wikipedia.org/wiki/Medium_of_exchange)" (something useful for conducting transactions, and "[store of value](http://en.wikipedia.org/wiki/Store_of_value)" (something valuable as an investment).

Was bitcoin designed to provide both functions, or just one? How does it mainly function today?

**Tags:** currencies, bitcoin-economy, money


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## 5 answers

### Answer by username_5 on 2011-08-31. Score: 12 | Accepted answer

Today, it primarily serves as a store of value. It is inherently more useful as a medium of exchange, its intended purpose. Perhaps a bit ironically, its expected future usefulness as a medium of exchange is what is driving its present usefulness as a store of value. The thinking is that if you get them now when they're cheap, in the future when they're used as a medium of exchange (and thus there's much more demand) they'll be worth more.


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### Answer by username_1 on 2012-01-21. Score: 1

Today, due to relative low acceptance rate, it doesn't fulfill it's role as a medium of exchange anywhere near potential. Instead the largest amount of transactions is, as with regular money, people speculating on it's future value.

It's important to look not at what it's meant to be, not at what it is, but how it works out for people. Occam's razor applies rigorously, the way something works is how it works for you. Don't complicate it.

In the near future it can be used interchangeably with any currency. The question of whether or not it is one is therefore irrelevant. It will be the only currency-like to be safe, certain, quick and cheap all at once. Let's not argue syntax, let's argue semantics.


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### Answer by username_2 on 2012-01-14. Score: 0

> When I use bitcoin as a medium of exchange I have to be confident that the bitcoins will not change in value between the point I receive them and the point I spend them.

Not really. Most methods of money exchange or transfer bear some costs or risks. Credit cards, for example, require fees (which are paid by the vendor of a good). If the price flictuation of bitcoin which happens during a transaction is small enough that it is more economical to use them than, than to ise other means, they are cheaper.

The duration of a transaction - that is, the time span between a buyer sending an amount and the vecdor beoing able to re-send that to an online monex exchanging services which pays that to his bank account - is around one hour. As credit card fees and costs are easily in the range of 5 % of a traded price, any volatilty which is less than that would still result in more economical transactions. However, quick changes om price are harder to handle - it is far more comfortable if the buyer can acquire his coins a few weeks in advance and the seller has several weeks of time. This a lower volatility is more comfortable for that.


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### Answer by username_3 on 2011-08-31. Score: 0

To be useful as a medium of exchange it must be a useful store of value.

When I use bitcoin as a medium of exchange I have to be confident that the bitcoins will not change in value between the point I receive them and the point I spend them.

> **Comments:**
> **username_0**: This is not at all true for many important cases, which are short-term transactions.  E.g. the classic case would be a transfer into bitcoins in one country, followed by an international bitcoin exchange and an immediate transfer out into a different local currency by the receiving party.  That doesn't require much faith in stability of the medium of exchange.  

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### Answer by username_4 on 2011-08-31. Score: 0

It was meant to be used as a semi-anonymous currency. Some people are using it as that, but a lot of people are using it as a store of value.


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