Will Bitcoin become money?
Abstract
This research examines Bitcoin's potential as money, considering its underlying technology, economic implications, and societal impacts. Through a literature review, the study explores Bitcoin's role as a medium of exchange, unit of account, and store of value, while evaluating its compatibility with different money theories. It analyzes Bitcoin's decentralized nature, unknown creator, and current usage scale. Findings suggest that Bitcoin faces challenges such as limited supply, volatility, and its potential for facilitating illicit activities. It diverges from traditional macroeconomic theories, raising concerns about long-term stability. Despite its limitations, Bitcoin offers transparency and decentralization. The research concludes that Bitcoin falls short of meeting traditional money criteria but acknowledges the potential of Central Bank Digital Currencies (CBDCs) to address these limitations and enhance digital payment systems. The ongoing evolution of cryptocurrencies and the exploration of CBDCs are crucial factors shaping the future of digital currencies and their impact on the financial landscape.
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