The main functions of money are a medium of exchange, a unit of account, a store of value. Any kind of object that can be used to full fill these functions can be defined as money.
Bit coins basically fulfill the first to needs with no doubt, since you can use bit coins as a medium of exchange and a unit of account. Even though to serve as a store of value these coins should be able to saved and retrieved at a later time for example: gold. Bit coins can be saved digitally in computers with digital wallet software but when we retrieve these coins after a specific period will it be predictably use full?
Currency is created by The central bank of a country, money (currency) can be measured using a method called M0, M0 is base money or the amount of the money issued by the central bank. This base money is typically controlled by the finance ministry or central bank of a country; these institutions print currency and release in to the economy.
Unlike the conventional flat currency bit coin has no centralized issuing authority to issue or control. The money supply or bit coin miner is programmed to develop every 210,000 blocks around every four years and by 2017 , ¾ supply will be generated.
Unlike gold, bitcoins are:
- easy to transfer
- easy to secure
- easy to verify
- easy to granulate
Unlike fiat currencies, bitcoins are:
- predictable and limited in supply
- not controlled by a central authority(Ex. Fed)
- Unlike electronic fiat currency systems, bitcoins are:
- potentially anonymous
- freeze proof
- faster to transfer
- cheaper to transfer