WHAT IS BITCOIN?

Post #23

Bitcoin and other cryptocurrencies constitute money. Money has three functions; people can use money as a unit of account, a store of value, and a medium of exchange. If I claim that a new Ford sells for $25,000 and a new Mercedes sells for $50,000, I am using money as a unit of account. When I put bitcoin in savings, I am using it as a store of value. If I buy something with it, I am using this currency as a medium of exchange. The largest entertainment company, AMC, will start accepting Bitcoin in 2021. Microsoft, Overstock, Newegg, BMW (the automobile company), AT&T, KFC Canada (the chicken company), Dish Network, and many others accept Bitcoin. Most European countries accept Bitcoin. I took a trip from Virginia, where I live, to Michigan, where I grew up, and there were Bitcoin machines in gas stations along the way.

Cryptocurrencies are as revolutionary today as the internet was in 1994. The internet changed the way the world communicates, and cryptocurrencies change the way money works. Digital currencies are virtual, but not necessarily crypto. Cryptocurrencies, such as Bitcoin and Ethereum, have no central issuing or regulating authority but instead uses a decentralized peer-to-peer system to record transactions on a blockchain and manage the issuance of new units.

You can view the different cryptocurrencies in different rooms. For example, you can be in the Bitcoin room with other people using Bitcoin or be in the Ethereum (Ether) room with others using the same currency. The combined value of all Ether and Bitcoin is now worth more than the market value of PayPal and is approaching the size of Goldman Sachs. The value of these cryptocurrencies has no top because fiat currencies have no bottom. Ethereum was launched in 2015 by a 21-year-old college dropout, Vitalik Buterin, born in Russia and raised in Canada. He now lists his residence, jokingly, as Cathay Pacific Airlines because of his travel schedule. He is the world’s youngest crypto billionaire.

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Published by Kenneth E. Long

Author, college professor of economics, swimming and tennis enthusiast

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