Bitcoin, Gold, and the Rush to National Digital Currencies

by Brendan Brown

Bitcoin as a money is just very unremarkable. Yet this digital coin is well on its way to becoming one of financial history’s great epic stories. Its promotors just hit lucky in finding themselves in the midst of a monetary inflation whose virulence intensified during a great pandemic. Double luck: the greatest speculative narrative of the accompanying asset inflation has been about the miracles of digitalization, a fantastic landscape for nurturing excitement about this new money.

Yes, on latest fact checking Bitcoin is money. We can tick the box that bitcoin performs one monetary function—medium of exchange. This is largely limited to twilight areas of the global financial space populated by diverse actors, some bad, and relates to virtual cash transfers between digital wallets. We cannot as honest inspectors tick other monetary function boxes—whether reliable store of value, denominator of loan agreement, or more generally as a standard for deferred payments.

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